Gas code has only delayed new supply: producers
The government’s intervention in the east coast gas market has delayed getting much-needed gas to buyers, in some cases by more than 12 months, say chief executives of small producers who point to policy moves that have made developing gas tougher.
The producers all expect to be eligible for exemptions from the price cap through the rules of Labor’s new code of conduct on gas that was released on Monday and came into effect on Tuesday.
Cooper Energy CEO Jane Norman says concessions made by government in the gas rules are important.
But they say the price cap and price controls that are now in effect have contributed to major delays in getting gas to retailers and manufacturers, just as the Australian Competition and Consumer Commission and the Australian Energy Market Operator have been warning of the urgent need for new supply to head off shortfalls.
“It’s gone to the right by 12 to 24 months probably, so it’s really delayed new supply coming in,” Cooper Energy chief executive Jane Norman said of the latest expectations of when gas from the company’s next project in Victoria should come online.
She said a court ruling last year that overturned a Santos gas project approval had also “added a risk premium” for offshore services companies thinking of bringing equipment to Australia and had resulted in greater requirements for consultation on offshore projects.
“The project approvals have got tougher,” she said, adding that more collaboration would be required between petroleum companies to bring in rigs and equipment.
Cooper had originally anticipated giving a final go-ahead for construction of its $400 million OP3D project in April, but that timetable was canned after the gas market intervention was announced in
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