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Watchdog to examine Australian gas market

by
April 19, 2017

The consumer watchdog has been told to investigate Australia's gas market.

Gas industry chiefs will once again traipse to Parliament House to be told they need to make more of their energy available to Australians and at a reasonable price.

Malcolm Turnbull is holding a second round of talks with gas companies on Wednesday, after bringing them all to Canberra in March to deal with the looming energy crisis.

"It is not acceptable for Australia to be, shortly, the world's largest exporter of LNG and yet to have a gas shortage on the east coast in its domestic market," the prime minister said on Tuesday.

"We will defend the energy security of Australians and gas supply, reliable and affordable supply, is a key part of that."

The agenda is likely to include a suggestion from a peak industry lobby group that the government facilitates gas exporters buying cheap gas on the Asian market to fill export contracts.

This would free up Australian gas for domestic use, both in industry and electricity generation.

The idea from the Australian Industry Group has won the support of Labor, which says the existing system has "gone topsy-turvy".

Opposition Leader Bill Shorten says it is outrageous that it's possible to buy Australian gas cheaper in Japan or Korea than industry Down Under can.

Resources Minister Matt Canavan has had detailed conversations with gas-producing companies about options, including swap arrangements.

He says the idea is realistic and was at the heart of discussions between government and the industry.

At the March meeting, Mr Turnbull elicited a promise from two exporters they would shortly put more gas into the domestic market than they took out, with a third considering following suit.

The government has also promised key crossbench senator Nick Xenophon it would fund a feasibility study into building a new gas pipeline between the Northern Territory and South Australia.

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