ACCC predicts gas supply shortfall in 2023

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The Australian Competition & Consumer Commission (ACCC) has expressed concern over the supply of Australia’s gas market, with three liquefied natural gas (LNG) dominating exports. 

A new interim report from the ACCC predicts a supply shortfall in 2023, and domestic energy security is at risk. 

ACCC chair Gina Cass-Gottlieb expressed concern a high concentration in the market is contributing of the “lack of effective upstream competition on the east coast.

“They may also increase the risk of coordinated conduct and increase the market power of the LNG exporters. This is particularly concerning given the current supply conditions and the reliance on the LNG exporters to meet domestic supply,” the chair said.

The ACCC has found the east coast market has “signficantly worsened”.

“To protect energy security on the east coast we are recommending the resources minister initiate the first step of the Australian Domestic Gas Security Mechanism.

“We are also strongly encouraging LNG exporters to immediately increase their supply into the market,” the chair said.

The ACCC noted LNG exporters purchased more gas from the domestic market than they supplied to the domestic market. 

The report follows the decision last month to temporarily lift competition rules to manage an energy supply crisis, as previously reported in The Mandarin. 

The government has said it will renegotiate with the heads of agreement, which the ACCC has welcomed. 

“Under the heads of agreement, exporters can offer excess gas to domestic market participants through an expression of interest process. 

“We are concerned that domestic gas users don’t always have reasonable notice of these offers, and that LNG exporters do not make counter-offers to bids, which could indicate they are not seriously engaging in the domestic market,” Cass-Gottlieb said.