The Australian government plans to introduce LNG export caps on advice from the regulator and market operator, when domestic shortages raise local gas prices. This export cap is expected to ease local prices and soaring energy costs for local industries. Gas producers called instead for lifting onshore gas exploration limits to boost supply and cut prices.
Over the last two years, local gas prices have surged, while three new liquefaction plants have been commissioned. Santos' Gladstone LNG is the sole drawing gas out of the domestic market to meet its export contracts, whereas Queensland Curtis LNG and Australia Pacific LNG claim they are net gas suppliers to the domestic market.
In march 2017, the Australian Energy Market Operator (AEMO) estimated that Australia could face a gas shortage that would threaten domestic power supply as early as in 2018. The AEMO expected the share of gas production exported as LNG to grow over the next few years, cutting gas volumes for the domestic market by 20% between 2017 and 2021, from 600 PJ down to 478 PJ.
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