Oil and gas company Santos has rejected fears of an east coast gas shortage and warns that customers from Asia are spooked by the prospect of Australian export controls.
Subscribe now for unlimited access.
$0/
(min cost $0)
or signup to continue reading
"There hasn't been a shortfall in the last six years," Santos chief executive Kevin Gallagher said on an investor call on Wednesday.
"I don't believe there will be next year either."
Santos earlier unveiled a record result in the six months to June 30, as the ongoing war in Ukraine and energy market disruption delivers a bonanza to Australian producers and shareholders.
Mr Gallagher said Asian trading partners were concerned about the prospect of the federal government imposing export controls on liquefied natural gas.
The Australian Competition and Consumer Commission gas inquiry interim report this month forecast the east coast of Australia could face a shortfall of 56 petajoules in 2023.
"I think it's important to look at the assumptions in the ACCC report," Mr Gallagher said.
"I don't think all of those things will come to pass."
The ACCC also recommended the federal resources minister use the first step of the Australian Domestic Gas Security Mechanism (ADGSM), which allows export controls without first declaring a formal gas shortage.
"The ADGSM process continues to be very concerning for our neighbours in Asia, who are also the investors and customers that have underpinned Australian resource development for 60 years," Mr Gallagher said.
He said LNG developers had worked collaboratively to supply the domestic market, and insisted there is more uncontracted gas than any predicted shortfall.
"I believe that we can work again with government to ensure that supply is available to the market," he said.
A heads of agreement signed with the federal government in January commits LNG exporters to offer uncontracted gas to the domestic market first on internationally competitive prices before it can be exported.
The ACCC has said the industry is not acting in the spirit of the agreement.
The Albanese government has committed to renegotiating the heads of agreement to get a better deal for consumers - residential and industry.
But Mr Gallagher said a drop in supply of coal and efficiency of renewables meant the gas that was meant for the domestic market was diverted for power generation this year.
"That led to the short-term very significant gas spikes that we saw."
Santos responded by diverting gas from Gladstone, adding a fifth drilling rig in the Cooper Basin, and arranged swaps with other producers, he said.
Australian Associated Press
