PM in Gladstone for LNG announcement to cut power costs
Prime Minister Scott Morrison will on Thursday reveal details of a new Heads of Agreement with east-coast liquefied natural gas (LNG) companies during a visit to Gladstone.
The agreement, signed by Mr Morrison and LNG exporters Australia Pacific LNG, Queensland Curtis LNG and Gladstone LNG, aims to ensure more gas is offered to the domestic market, more often, and on more competitive terms.
It will also aim to secure competitively-priced gas supply for the east coast market at least until 2023.
Mr Morrison said cheaper and more reliable energy was central to Australia's economic recovery and the government's JobMaker plan.
"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 Minster 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.
"As part of our JobMaker plan we are delivering more Australian gas where it is needed at an internationally competitive price, this particularly includes manufacturing businesses who employ more than 850,000 Australians, many of which rely on gas to operate."
Since the Government first acted in mid-2017 to ensure gas supplies for the domestic market through the introduction of the Australian Domestic Gas Security Mechanism and the first Heads of Agreement, the spot price for gas has dropped from $12.50 to $10.50 a gigajoule to now be between $7 to $5 a gigajoule.
Minister for Resources, Water and Northern Australia Keith Pitt said the new Heads of Agreement would put Australian families and businesses first by making sure Australia did not experience a shortfall in supply at the expense of exports.
"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.
"The strengthened Heads of Agreement commits LNG exporters to offer uncontracted gas to the domestic market first on competitive market terms before it is exported.
"It complements the Australian Domestic Gas Security Mechanism which also references the Australian Competition and Consumer Commission (ACCC) LNG netback price series.
"Both the AEMO and ACCC have found east coast of Australia has a low, but increasing, risk of facing a gas shortfall.
"We are working to get the right balance between affordable gas for manufacturers and a price that encourages new gas resource development.
"I want to also acknowledge the success of our LNG export industry, especially here in regional Queensland.
"It has brought jobs and opportunity to many regional communities in central and southern Queensland and put money in the pockets of farmers who are hosting the gas wells on their farms."
Member for Flynn Ken O'Dowd said the Agreement highlighted the key role gas played in local industries.
"The gas industry drives significant local exports and is also a big employer in the Gladstone region and the agreement will lay the foundation for future growth aiding the COVID recovery," Mr O'Dowd said.
The Coalition Government is also continuing with its commitments to unlock new gas supplies through the Strategic Basin Plans with the Beetaloo Basin Plan finalised and work progressing on unlocking gas in the North Bowen and Galilee Basin.
Minister Pitt previously announced a commitment to provide up to $50 million for exploration that occurs before 30 June 2022, in the Basin, along with $173 million for road upgrades to support the development of a gas industry based on Beetaloo gas resources.
"The Beetaloo has the potential to mirror the US shale gas revolution - bringing jobs and investment to the north while providing secure and affordable gas supplies to industry," Mr Pitt said.
"The Australian Government will continue to work with relevant regulators and energy market bodies, including AEMO, ACCC, Australian Energy Market Commission and the Australian Energy Regulator, to build on reforms which improve the functioning of the east coast domestic gas market.
"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 market."
Affordable gas is also a critical component of the government's Modern Manufacturing Strategy, which seeks to grow Australia's manufacturing sector by building scale in areas of competitive strength, driving collaboration and better aligning resources across governments, boosting industry and the research community, and strengthening sovereign resilience in areas of strategic importance.
Prime Minster Morrison's itinerary while visiting the Port City on Thursday includes a visit to Northern Oil Refinery and sod turning at CQU's Gladstone School of Manufacturing.