Labor, industry call for gas export swaps

Labor leader Bill Shorten is pressuring the government ahead of its next meeting with the gas industry to look at new ways of ensuring domestic supply.

A gas burner on a hob cooking appliance

File photo Source: Press Association

Labor has taken up the call of business for gas export swaps to fix what it sees as a "topsy-turvy" market.

It comes as the Turnbull government prepares to haul gas company chiefs to Canberra on Wednesday to once again press them on action to end a supply crisis in Australia.

Labor leader Bill Shorten says local industry can't wait 12 or 18 months for the problem to be fixed.

"Malcolm Turnbull's got one job tomorrow: to bang heads and get the businesses who are producing the gas to prioritise Australian jobs and Australian business before they export gas we need here," he told reporters in Melbourne, where he visited plastics manufacturer Qenos.

"It is outrageous that it is possible in Japan or Korea to buy Australian gas cheaper than our own industry can buy it in Australia. The system has gone topsy-turvy."

Mr Shorten insists he has nothing against companies wanting to export gas - but only if they met Australian demand first.

Labor has warned of widespread closures of manufacturing plants and thousands of job losses if the crisis isn't addressed.

The Australian Industry Group wants the government to allow exporters to buy 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.

Ai Group head Innes Willox offered the suggestion in a letter to Labor and the government last week, along with another idea for a national interest test on gas exports.

A modest reduction in what is exported could easily cover domestic shortfalls for several years.

"It should be possible for this arrangement to leave nobody worse off and the domestic market considerably better off than the status quo," Mr Willox wrote.

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

"Obviously it's a matter for commercial negotiation, those details, it's not for the government to negotiate gas contracts with users in Asia," he said.

"But certainly the type of arrangements the (Australian Industry Group) are foreshadowing there are realistic, and they are at the heart of discussions between the government and industry."

Greens energy spokesman Adam Bandt rejected the swaps as craziness and a desperate idea.

At a March meeting with gas industry heads, Prime Minister Malcolm 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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Source: AAP



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