Australian gas industry looks for policy repair work to enhance investment

Australia's gas market executives are seeking more steps to bring back an financial investment environment they state has been damaged by a series of state interventions to improve domestic supply and curb skyrocketing energy costs.

While a lot of executives at the Australian Energy Producers Conference in Perth were broadly in favour of the Australia Future Gas strategy revealed by the federal government this month, they required instant action and improvements to the policy to avoid new gas supply shortages.

If you take a look at some of the policy changes that have occurred over the past few years, there are things that are, in many ways, wearing down Australia's competitiveness, stated Meg O'Neill, President & & Managing Director, Woodside Energy.

Woodside was locked in a drawn-out disagreement with employees last year over salaries and working conditions. Though big scale strikes were avoided, the public nature of the standoff sent out global gas costs skyrocketing and raised questions over the reliability of the country, last year's second-largest exporter of melted gas (LNG), as a consistent fuel supplier.

The labour environment is a very difficult one, and getting more difficult gradually, O'Neill told the conference.

Shell Australia's country head Cecile Wake said the Future Gas method yaps about the need to avoid gas shortfalls, however the industry was not seeing concrete policies that promote the advancement of brand-new supplies.

We have ... long standing policies that just are no longer really suitable for purpose, and what we need is for them to be reformed so that we get everybody pointing in the exact same direction, Wake told on the sidelines of the conference.

The Future Gas strategy followed the government faced criticism for its variety of short-term measures to enhance domestic gas supply and lower soaring energy rates, such as rate caps and export limits from the country's three east coast projects.

Saul Kavonic, an energy expert at MST Marquee, said the market was glad to see the federal government acknowledging the significance of gas, however was waiting to see if actions would follow words.

A great deal of damage has been done to Australia's credibility for investment for gas companies and trade partners. One file is the primary step, however not fixing it, Kavonic said.

Wake said Shell takes a look at a sustainable competitive advantage, strong client demand and steady fiscal and federal government policy support while trying to find places to invest.

Historically, Australia might tick all three of those unequivocally. The last couple of years, it has been more difficult on the 3rd box, she said.

(source: Reuters)