Australia Pacific LNG has made an agreement with Origin Energy to supply a further 41 petajoules (PJ) of gas to the east coast gas market.

The gas sales agreement will cover around two-thirds of the gas supply shortfall forecast for 2018, boosting Australia Pacific LNG’s domestic contracted gas supply for 2018 to more than 186 PJ, or almost 30 per cent of the market’s demand.

APPEA Chief Executive, Dr Malcolm Roberts, said the deal was further proof that Australia’s east coast LNG industry is committed to supplying gas to the domestic market.

“The LNG projects gave a commitment that there would not be a gas shortfall on the east coast in 2018 and they are delivering,” Dr Roberts said.

“Queensland’s gas industry is producing enough gas to meet its export commitments and supply the domestic market.

“Further south, the failure of New South Wales and Victoria to develop their own gas supply means customers in those states are paying a premium for their gas. The Australian Competition and Consumer Commission says transport costs add 25 per cent to the price southern customers pay for Queensland gas.

Origin Executive General Manager Energy Supply and Operations, Greg Jarvis, said, the agreement to buy a substantial volume of gas follows Origin’s recent commitment to bring on more supply to help meet the needs of the domestic market.

“Our east coast portfolio needed more gas to allow Origin to meet demand from large customers who rely on gas for their businesses, and also to fuel peaking power stations which are crucial to security of electricity supply – particularly as we head into the summer period,” Mr Jarvis said.

“East coast LNG producers including Australia Pacific LNG have committed to divert more gas to the domestic market to avoid any potential gas shortfall, and this agreement shows Origin’s determination to be part of the solution to get more gas to Australian customers.

“We have also consistently stated that increasing gas supply to the domestic market is a critical action to help bring down gas prices for customers.

“We will continue to look for additional ways to improve security of gas for customers that rely on it up and down the east coast of Australia.”

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