MELBOURNE, Aug 17 (Reuters) - Santos does not
expect the Australian government to curb exports from the
country's three east coast liquefied natural gas (LNG) plants,
as the owners will find a way to supply enough fuel to the
domestic market to avert a forecast shortfall.
On Aug. 1 the competition watchdog urged the government to
consider curbing gas exports under the Australian Domestic Gas
Security Mechanism (ADGSM) for the first time, warning the
country faced a gas supply shortfall in 2023.
Santos Chief Executive Kevin Gallagher said he expected the
three east coast LNG exporters - GLNG run by Santos, QCLNG run
by Shell Plc and APLNG run by ConocoPhillips -
will reach a deal with the government to cover the forecast 56
petajoules shortfall from their uncontracted gas volumes.
Santos' GLNG plant is seen as the most likely of the three
east coast LNG plants to face export curbs as GLNG takes some
gas from the domestic market to help meet its LNG export sales
as the project does not produce enough from its own fields.
"I'm confident GLNG won't be hit," Gallagher told analysts
on a call after the company reported a record first-half profit.
Resources Minister Madeleine King is reviewing the gas
security mechanism and whether to trigger it to curb exports in
the near term.
"I've been really encouraged by the support and the comments
that have come from Minister King around this issue," Gallagher
"Likewise what I've heard from our new prime minister is
very encouraging. They're taking a very measured approach
towards understanding this issue."
A spokesperson for King reiterated the government is
continuing to work with gas and LNG producers and states and
territories "to encourage new supply, and to find industry-led
solutions to secure Australia's ongoing energy needs".
Santos' partners in GLNG are Malaysia's Petronas,
TotalEnergies and Korea Gas Corp (KOGAS).
Gallagher said that while the threat of gas export curbs may
be weighing on Santos' share price, it was also creating
uncertainty for LNG investors and customers.
"These are same customers and the same investors we will
need for clean fuels in the future," he said.
(Reporting by Sonali Paul; editing by Richard Pullin, Elaine