LNG Buyers Worry Australia Policies May Limit Exports, Woodside Says

(Bloomberg) -- Australia’s liquefied natural gas buyers fear that recent policy changes to safeguard domestic resources and reduce emissions could limit exports, according to the nation’s top seller.

LNG buyers, including Japanese companies, told Woodside Energy Group Ltd. earlier this month that they are worried about future supply, said Chief Executive Officer Meg O’Neill. Woodside is in talks with the Australian government to resolve these policy concerns, she added.

“They are seeking certainty that Australia will remain a trustworthy and reliable supplier of LNG,” O’Neill said. “Buyers are worried about the number of regulatory changes that have been implemented.”

Earlier this year, the government passed its signature safeguard mechanism legislation, which will enforce Australia’s largest polluters, including its giant LNG plants, to cut their emissions over time. In addition, a cap on gas prices was put in place in late 2022 to protect Australians from soaring energy prices, while policymakers revised measures that could restrict LNG exports as a last resort to ensure supply at home.

Japan’s government has expressed concern that the new rules threaten its energy security, the Wall Street Journal reported earlier this month. Australia was Japan’s top LNG supplier last year, according to ship-tracking data.

The solution to domestic gas challenges is more supply, and the government should take steps to encourage more LNG in the market, O’Neill said. 

“We need to ensure that the policy framework here is one that allows us as a nation to meet our obligation to our trading partners,” she said.

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