Top Gas Exporter Australia Seeks to Extend Domestic Price Cap

(Bloomberg) -- Australia may extend a domestic price cap on natural gas until at least 2025, as part of regulations that have already drawn protest from the country’s powerful fossil fuel industry and raised concern among buyers from one of the world’s biggest exporters of the fuel.  

The government proposed extending the limit of A$12 per gigajoule ($7.60 a million British thermal units) imposed in December for the East Coast market, with a first review planned to start by July 2025, it said in a draft paper on Wednesday. It plans to finalize the measures by the new fiscal year, which starts on July 1.

The initial cap was only intended to last until the end of 2023 as a means of limiting soaring energy prices sparked by the Russian invasion of Ukraine. Under new measures contained in the draft paper, small producers that only supply the domestic market would be exempt from the price limit, while larger providers can apply for an exemption if they make domestic supply commitments.

Both liquefied natural gas exporters and major buyers including Japan and China have raised concerns about the regulations for the East Coast market, which includes three LNG export facilities in Queensland. The nation’s seven other plants aren’t covered.

READ: Major LNG Exporter Flags ‘Concern’ Over Australia’s Gas Policy

The measures “will ensure sufficient supply of Australian gas for Australian users at reasonable prices, give producers the certainty they need to invest in supply, and ensure Australia remains a reliable trading partner by allowing LNG producers to meet their export commitments,” the government said Wednesday.

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