Industry burning over gas plan

MAJOR gas exporters on the east coast have promised to ensure higher domestic supplies, but the industry has slammed the Federal Government’s plan to restrict gas exports.

Shares in Santos tumbled 5.5 per cent yesterday while Origin Energy fell 3.6 per cent after the Government announced export restrictions for liquefied natural gas to prevent domestic shortages.

Under the Australian Dom- estic Gas Security mechanism, the Government would have the power to impose export controls when there was a shortfall of gas supply in the domestic market, Prime Minister Malcolm Turnbull said.

The move would bring local gas prices in line with the global market and protect thousands of jobs in gas-dependent manufacturing industries, he said.

Analysts said the curbs were squarely targeted at the Glad- stone LNG project in Queensland, in which Santos has a major stake.

In a statement, the group said it would seek clarity from the Government on how the new policy would work.

Its bigger rival — the Origin Energy-led Australia Pacific LNG — reaffirmed plans to continue supplies to the domestic gas market.

The gas industry’s peak lobby group said the curbs were a “short-term measure” that risked making tight market conditions worse.

“Restricting exports is almost unprecedented for Australia,” Australian Petroleum Production & Exploration Association chief Malcolm Roberts said.

“Governments must address the real problem — a lack of supply created by high regulatory costs and political barriers. With exploration at a 30-year low, the pipeline for future supply is precarious.”