Threatened manufacturers promised new Australian gas deal

malcolm-turnbull

Malcolm Turnbull has promised to halve the price manufacturers pay for gas to ensure affordable supplies across the industry.

The prime minister has noted that 65,000 jobs which are reliant on gas are at risk and would remain that way until action was taken.

The government has announced that Resource minister Matt Canavan will have new powers to “block exports” unless there are adequate supplies to meet Australia’s needs.

“It will ensure that the price of gas in Australia is at levels comparable to that in the international market because it is a global commodity,” Mr Turnbull told ABC radio.

“But what we’ve seen is because of these anticipated shortfalls, gas suppliers have been proposing contract prices which are really way too high.

“They are as much as four or five times the price per gigajoule, which is the metric, that are being offered in the United States.

“It’ll be cheaper than the prices that are being offered now, people are being offered prices of $20 a gigajoule, it should be around half that or less.”

While LNG exporters have contractual obligations they must meet, Turnbull also said that Australia’s free-trade agreements gave the government a right to protect local industry from gas shortages.

“They will not be able to export gas if that has the consequence of reducing the availability of gas for the Australian market,” Turnbull continued.

“This is a national interest matter, it is a short-term solution to a longer-term problem. The longer-term challenge that we face is we are not producing enough gas on the east coast — that is because of bans on gas exploration and development in Victoria above all and to a lesser extent in NSW.”