“Large LNG export demand is changing the dynamics of the east coast gas markets,” AEMO said in its March report. And that’s clearly being reflected in market prices — short-term gas prices in the east coast averaged $9.95 a gigajoule during March quarter, double last year’s levels, according to advisory firm EnergyQuest.
AEMO expects LNG exports will continue dominating eastern gas demand and supply and projects the area’s overall gas production to decline from 600 petajoules in 2017 to 478 in 2021.
This drop in eastern output could lead to nation-wide gas shortages that may eventually trigger electricity supply shortfalls between 2019 and 2021, the watchdog continued.
The government was “asleep at the wheel” when they built those Queensland facilities, said Fereidun Fesharaki, chairman of Facts Global Energy. “They should have stopped then.”
He referred to Turnbull’s export restrictions as an example of “Trump-style populist measures” and said they projected a “disappointing” signal to the outside world.
“The government interfering in exports does serious harm to Australian projects and the future of sales out of Australia,” he continued, calling such intervention “globally unacceptable.”
National LNG exports are expected to reach almost 60 million metric tons in 2017, up by 63 percent on-year, according to EnergyQuest.
A failure of previous policies by state and national governments caused the current crisis, observed Peter Botten, CEO of Oil Search, an Australian-listed exploration and development company focused on Papua New Guinea energy.
“You cannot be in the east coast of Australia and have a massive gas shortage when you’ve got substantial gas being exported. The industry has actually got what it deserved in many ways,” he continued, adding that government action was “inevitable” in the present situation.