APPEA: LNG export restrictions could be counterproductive

The Australian Petroleum Production & Exploration Association (APPEA) said the restriction of LNG exports in favour of domestic supply would not bring the intended results. 

Speaking of the government’s proposed Australian Domestic Gas Security Mechanism (ADGSM), APPEA’s chief executive, Malcolm Roberts said it “was a short-term fix and not a long-term solution.”

The government started the formal process to consider whether the ADGSM will be required to restrict Queensland liquefied natural gas (LNG) exports for 2018.

Roberts stresses the export restrictions could exacerbate the issue they were meant to solve.

Despite political restrictions and bans, gas production in the east coast tripled in the past five years.

“The only sustainable solution to the challenges facing the east coast gas market is more gas supply. The government should be working with industry on regulatory reforms that reduce the cost of developing new supply,” Roberts said.

He added that the Energy Supply Outlook (ESO) released in June by the Australian Energy Market Operator (AEMO), confirmed that there is no need for the Commonwealth to restrict gas exports.

The outlook also shows that LNG export projects’ demand for natural gas was lower than the March 2015 forecast.

Roberts did, however, note that the review is likely to show no supply shortfalls are expected, meaning no LNG export restrictions are needed.

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