2 minute read

Update on AGL's position on gas

There has recently been some discussion portraying AGL incorrectly in relation to the issues facing Australia’s east-coast gas market.

light grey logo
AGL Energy
18 June 2018

AGL has previously clarified the facts in a blog last October – our position remains the same. In short:

  • AGL does not export gas. A transaction was made in 2015 to supply gas to the GLNG owners (Santos, Total, Petronas and Kogas) but this was only after making the gas available to the domestic market.
  • The sale to GLNG was made prior to the closure of Hazelwood and Northern, which significantly increased the demand for gas for power generation. It is an example of why AGL strongly supports advanced notice of closure of power stations so the market can plan how they will meet their customers’ needs.
  • Since the sale in 2015 there has been a reduction in gas production at Longford, which is the main supplier to NSW and Victoria, further tightening the gas market.
  • The only way to reduce gas prices in the domestic market is to increase competition in gas supply. AGL’s LNG import project will potentially bring 100 pj a year of additional gas supply to Eastern Australia – enough to supply Victoria’s entire residential demand. More than 10 commercial and industrial customers have signed agreements with AGL supporting the LNG import project.

In addition, while AGL did raise concerns about an upcoming gas shortage prior to the GLNG sale, this concern related to periods of high demand (i.e. the winter peak), and the GLNG contract did reflect this concern by enabling AGL to continue to utilise the gas during periods of high demand, as announced at the time.