NATION PM set to rule on LNG deficit

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 of gas needed 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 fail- ure” on the part of other states to develop their own gas resources.

“Queensland is an honourable exception. Queensland is producing most of the gas on the east coast of Australia, but both Victoria and New South Wales are not doing enough,” Mr Turnbull said.

“We will not let the power bills of Australians rise further and further because of a shortfall of gas on the east coast of Australia.”

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 for 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.

Opposition energy spokesman Mark Butler said Mr Turnbull should pull the trigger on the gas reserve powers.

“Every single day the Prime Minister continues to fudge and delay and rely more on talk rather than action is another day that households see their power prices go up and up and up and Australian businesses and the tens of thousands of people that they employ see a future of job insecurity,” Mr Butler said.