Gas crisis far worse than we thought

THE gas crisis in Australia is three times worse than previously thought, as three big export hubs in Queensland will send more than twice the gas needed locally overseas.

The risk of power blackouts now requires “close attention and monitoring”, the Turnbull Government has been warned.

Prime Minister Malcolm Turnbull has stopped short of imposing export controls on Queensland’s three liquefied natural gas projects, after receiving two reports on the east coast market from the Australian Energy Market Operator and the Australian Competition and Consumer Commission. He is giving gas companies one last chance to explain how they will avoid running out of gas, with the Government to decide whether to pull the trigger by November 1.

The three LNG projects on Curtis Island – run by Santos, Origin and Shell – are expected to produce more than 70 per cent of the east coast’s gas next year and export more than twice the amount required to meet domestic demand.

This will come as Australia’s east coast gas shortfall could be up to 107 petajoules in 2018, which is three times worse than predicted six months ago.

Mr Turnbull said there had been a “comprehensive failure” on the part of other states to develop gas resources.

“Queensland is an honourable exception. Queensland is producing most of the gas on the east coast of Australia,” Mr Turnbull said.

ACCC chairman Rod Sims said prices in southern states were higher as a result of lack of competition and supply and could be reduced if more areas were opened to development.

He said the shortfall could also be met by the 63.4 petajoules expected to be sold on the international spot market – which are over and above the companies’ contractual obligations – being redirected to the domestic market.