Santos chief executive Kevin Gallagher.
Santos chief executive Kevin Gallagher.

Curtis Island LNG boss hits back at export caps

THE GLNG site's Australian boss is calling on the Federal Government to rethink its new gas policy, labelling it "reactive politics".

As it stands, the Australian Domestic Gas Supply Mechanism could invoke export controls on shipments from the Santos GLNG site - the only Curtis Island LNG exporter which uses third party gas to fill international contracts.

The policy was announced earlier this year following months of discussions on high domestic gas prices and a reported looming gas shortage.

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Santos chief executive Kevin Gallagher said an increase in supply and demand, high transportation costs and the global oil price rising were the perfect storm to drive up domestic energy prices.

Openly sharing his distaste for the new policy at an energy forum this week, he said the policy was not a long-term solution.

"The ADGSM is clearly not a long-term solution to high domestic gas pricing, nor is it the substitute for a properly developed national gas plan," he said at the Committee for Economic Development of Australia energy forum this week.

The ADGSM, which has been criticised by Gladstone's deputy mayor Chris Trevor, could see international exports from GLNG capped or diverted into the domestic market, if a gas shortage is forecast.

"Gas reservation should not be applied retrospectively to restrict the export of gas which is already committed under long-term, off-take agreements," Mr Gallagher said.

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"A better alternative would be to restrict the export of uncontracted gas available to be sold into the LNG spot market."

Mr Gallagher again reinforced his support of Federal Government intervention on state gas moratoriums.

He said a "frank and open discussion" about gas supply, reducing costs and the role of gas in the energy mix was required.