Australia's Gas Paradox: Supply Crunch Looms Despite Rich Reserves

Government moratoriums could mean that "importing LNG from Curtis Island or Papua New Guinea" may be the only way to meet gas demand in Victoria and New South Wales, Shell Australia Chairman Andrew Smith said in a speech last week.

Shell is sitting on one of the biggest undeveloped gas reserves onshore, at its Arrow arm in Queensland, but Smith says southern demand should be met with local gas due to the costs of pipeline transport.

Australia's competition watchdog has pipeline costs in its sights - saying operators have been able to charge monopoly prices - and also wants to boost competition between suppliers.

The federal government is trying to address the issues, with former Resources Minister Josh Frydenberg now running a revamped portfolio bringing energy and environment policy together.

Reforms would aim at a "more affordable, accessible and reliable energy supply" as Australia moves to cut emissions, Frydenberg said in an interview.

He urged states concerned about onshore drilling not to impose blanket bans, but to evaluate projects individually.

"I don't think they would want to be explaining to their constituents why they adopted policies that drove prices up," Frydenberg said.

(Reporting by Sonali Paul; Editing by Richard Pullin)


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Rudolf Huber  |  August 19, 2016
And herein lies the rub. Thats why some LNG plants run their operations down and even consider mothballing. The pressure simply becomes unbearable. But no excuse is bad enough for them to make them admit this. US plants simply dont have this issue to deal with


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