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Gas companies will find supply: minister

Energy Minister Josh Frydenberg is confident energy companies will ensure enough gas is available in Australia in 2018 even if demand reaches upper predictions.

Deputy Prime Minister Barnaby Joyce during a press conference.
Barnaby Joyce says gas companies have no reason to tell the government "porkies" on domestic sales. (AAP)

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Source: AAP


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The federal government is confident an agreement with big gas companies will ensure there's no shortage of the fuel in 2018 without the need to resort to legal strongarming.

Santos, Origin Energy and Shell on Wednesday committed to offering enough gas to the local market to cover an expected shortfall in 2018, following a meeting with Malcolm Turnbull and senior ministers in Sydney.

Energy Minister Josh Frydenberg says the gas companies will be able to find enough supply, whether the shortfall is the minimum predicted 54 petajoules or at the upper end of 107 PJ.

The agreement, to be nutted out at another meeting next week, only covers 54 petajoules.

The Australian Energy Market Operator has warned the upper limit could be reached due to unexpected events like poor weather patterns that mean renewables generate less electricity than anticipated or a coal-fired power station breaks down.

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"They will make the gas available should that be needed," Mr Frydenberg told ABC radio on Thursday.

"They've also given a commitment there will be no shortfall across the country next year, that they treat this as a strategic and energy security issue."

Conversely, he was also confident that at a minimum 54 PJ of gas would be needed and the companies wouldn't come seeking compensation for putting aside gas that didn't end up being used.

Deputy Prime Minister Barnaby Joyce has warned he can still pull the trigger and limit what gas is sold overseas if Australian exporters "don't play ball" and break their promise.

Mr Frydenberg said while it was good to get the agreement for short-term supply, the nation faced a longer-term structural problem of needing more gas development.

"This is where the states have to stop outsourcing their responsibilities to Canberra," he said.

The minister welcomed comments from the Victorian Farmers Federation that they would be open to seeing the state government lift its moratorium on exploring for conventional gas resources.


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