Australian government signs HoA with Curtis Island LNG exporters

The Australian Government signed a Heads of Agreement (HoA) with the country’s three joint ventures exporting LNG through Curtis Island plants in Queensland to secure competitively priced gas for the east coast domestic market.

The aim is to prevent a gas supply shortfall, improve security and affordability of future domestic gas supply, and introduce transparency measures for improved customer information.

New commitments from the JVs, led by Shell (Queensland Curtis LNG), Santos (Gladstone LNG), and Origin Energy (Australia Pacific LNG), will lead to an extra 157 petajoules of gas for the domestic market in 2023, with gas to be supplied in line with seasonal demand, the government said.

Under the HoA, LNG exporters will offer uncontracted gas to the domestic market on competitive terms with reasonable notice before seeking export sales. Domestic gas customers will not pay more for the LNG than international customers.

There also will be enhanced accountability, with quarterly compliance reporting to the Federal Minister for Resources and oversight by the competition watchdog, the Australian Competition and Consumer Commission (ACCC).

Prior to signing, exporters had expressed concern that any precipitate move to head off the forecast 2023 gas supply shortfall could damage Australia’s sovereign risk and scare off foreign investment in the country’s gas resources.

However, the HoA has been welcomed by the exporters. Santos said the arrangement respects existing export contracts, thus safeguarding Australian exporters’ relationships with international markets.

Northern Territory Minister Madelaine King said the new agreement means the projected gas shortfall will be avoided and that there is now no current need to activate the Australian Domestic Gas Security Mechanism.