More domestic gas needed to fix the east coast crisis

The following AFR article discusses the latest developments in the Australian east coast energy markets.

The article discusses explicitly regulatory intervention forcing export ready gas to be directed into the domestic market to avoid shortages and ease domestic soaring prices.

CEO of Woodside Energy Meg O’Neil blames these issues on a lack of investment in new gas supply across the country.

The situation domestically is being made worse with increased demand for Australian Liquefied Natural Gas (LNG) exports due to global supply shortages stemming from the Russia/Ukraine conflict.

We have long held the view that there has been chronic underinvestment in new gas supply worldwide, especially here in Australia.

This is why we are Invested in domestic gas explorer Top End Energy (ASX: TEE), which holds prospects in the NT and QLD.

To see why we are invested in TEE and what we are looking to see the company achieve over the next 12 months, check out our 2022 TEE Investment Memo here.

Below are our key takeaways:

• On Tuesday, the Australian Energy Market Operator (AEMO) directed Queensland’s LNG producers to make more gas available for domestic consumption.
• The country’s largest producers responded, with the east coast gas pipeline at about 90% capacity on Thursday.
• This is the latest development in Australia’s energy crisis, with electricity and gas prices across the east coast soaring to record levels.
• CEO of ASX listed Woodside Energy (one of the biggest gas suppliers to the east coast markets), Meg O’Neill, blamed the east coast gas crisis on under-investment in new supply due to political and policy decisions.
• O’Neil is quoted saying, “The reality is there’s no quick fixes to this. The underinvestment is structural, that’s been underway for multiple years”.

To read the full AFR full article, click here.