- The Federal Government has struck a new deal with east coast liquefied natural gas (LNG) producers under the JobMaker scheme to keep domestic gas prices competitive until at least 2023
- Prime Minister Scott Morrison said a heads of agreement (HOA) has been signed with a string of LNG exporters to secure lower local prices
- The deal follows on from a similar HOA signed in mid-2017 which saw gas prices fall from between $12.50 and $10.50 per gigajoule in 2017 to between $7 and $5 per gigajoule in 2021
- The purpose of the deal is to strike a balance between low prices to support Australian households and manufacturing businesses and high enough prices encourage new gas resource development
- On top of today’s gas price deal, the Coalition said it is still working to unlock new gas supplies through its Strategic Gas Plans
The Federal Government has struck a new deal with east coast liquefied natural gas (LNG) producers under the JobMaker scheme to keep domestic gas prices competitive until at least 2023.
Prime Minister Scott Morrison said in a press release this morning a new heads of agreement (HOA) has been signed with a string of LNG exporters to secure lower gas prices for Australia’s eastern coast.
These companies include Australia Pacific LNG, Queensland Curtis LNG, and Gladstone LNG.
The Prime Minister said cheap energy prices have been central to Australia’s economic recovery plan in light of the devastating COVID-19 pandemic.
“Gas is critical to our economic recovery and this agreement ensures Australian businesses and families have the gas supply they need at the cheapest possible price,” the Prime Minister said.
“This is about making Australia’s gas work for all Australians, while also supporting economic growth and backing important regional jobs in our expanding LNG sector,” he said.
Importantly, keeping local gas prices low means Australian producers are delivering more gas locally, creating more jobs for Aussie workers. The Prime Minister said competitive gas prices will have a particularly strong impact on manufacturing businesses, which employ more than 850,000 Australians.
Today’s agreement follows on from a similar HOA signed in mid-2017 to lower Australian gas prices. According to the Federal Government, the 2017 deal saw the spot price of gas drop from between $12.50 and $10.50 per gigajoule in 2017 to between $7 and $5 per gigajoule in 2021.
With the new HOA, these prices are likely to continue.
Resources Minister Keith Pitt said the government is working to find the balance between affordable gas for manufacturers and a strong enough price to encourage new gas resource development.
“The Coalition Government remains committed to delivering lower energy prices, and to make sure all Australians benefit from increased supply and reliability,” Minister Pitt said.
Unlocking new gas
On top of today’s gas price deal, the Coalition said it is still working to unlock new gas supplies through its Strategic Gas Plans. The Beetaloo Basin Plan is now finalised and the government is progressing to unlocking gas in the North Bowen and Galilee basins.
Minister Pitt said Beetaloo has the potential to mirror the U.S. “shale gas revolution” while bringing jobs and investment into northern Australia.
“The Australian Government will continue to work with relevant regulators and energy market bodies … to build on reforms which improve the functioning of the east coast domestic gas market,” the Minister said.
“This includes establishing an effective Gas Hub at our most strategically located and connected gas trading hub at Wallumbilla in Queensland to deliver an open, transparent and liquid gas trading makret.”