Australia considers curbing gas exports to avert domestic supply crunch

Reuters. FILE PHOTO: Model of an LNG tanker is seen in this illustration taken May 19, 2022. REUTERS/Dado Ruvic/Illustration

By Sonali Paul and Renju Jose

MELBOURNE (Reuters) -Australia said on Monday it will decide whether to curb exports of liquefied natural gas (LNG) after a watchdog urged restrictions, warning one of the world's biggest suppliers of the fuel could face a shortfall and soaring prices next year.

The government's move, after a recommendation from the Australian Competition and Consumer Commission (ACCC), comes even as the country vies with Qatar and the United States as the world's top LNG exporter.

The ACCC warned extra gas is needed to offset declining output at offshore fields that have long supplied the populous east coast, home to nearly 90% of Australia's population.

Resources Minister Madeleine King said she would consult with LNG exporters and Australia's trading partners before making a decision in October. The ruling could affect fuel supplies and prices in 2023 for global consumers already roiled by gas disruptions due to the war in Ukraine.

Export curbs would most likely impact the Gladstone LNG joint venture led by Santos Ltd, whose partners are TotalEnergies SA, Korea Gas Corp (KOGAS) and Malaysia's Petronas.

The call for action came in an ACCC recommendation that the government pull the trigger on the Australian Domestic Gas Supply Mechanism. The measure set up in 2017 can be used to force the east coast's LNG exporters to divert gas to the domestic market to avert shortfalls.