Australia Still Considering a Reduction in LNG Exports Ahead of Next Winter

Australian gas exporters are facing further pressure from ministers to keep supplies in the domestic market to avoid supply tightness.

• The comments to do so came today from the ministers from the two most populous states, New South Wales and Victoria. The Australian resources minister said last week that she was considering a proposal to keep gas supplies in the country.
• Australia has been having meetings to prepare an emergency plan to avoid gas shortfalls ahead of Australia’s winter in the middle of 2023.
• "We produce more than sufficient gas to meet our needs, but the problem is too much of it has been allowed to be exported at our own cost, and that's got to change," Victoria state energy minister Lily D'Ambrosio said at a televised media conference.
• "And what we need to do is prioritise Australian gas for Australian gas users ahead of companies making super profits and exporting that gas offshore," New South Wales energy minister Matt Kean said.
• Pulling Australian LNG exports off the market would have ramifications for the global market as Asian and European buyers currently compete for cargoes, particularly from the US.
• Australia’s Prelude project is currently not exporting due to industrial action but it is hoped a resolution will be found this month after Shell stopped paying the wages of those involved in the action.
• Freeport LNG in the US has been out of action since June 8 due to a fire but is expected to begin partial service in early October. A return of Prelude and Freeport in the short-term would mark a significant improvement for the global LNG market.