Australia’s oil and gas industry reaffirms commitment to domestic market under new Heads of Agreement

Australia’s major east coast natural gas producers have reaffirmed their commitment to delivering secure, competitively-priced gas to domestic customers.

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Representatives of three east coast LNG projects signed an extended Heads of Agreement (HoA) with the Commonwealth late last year.

The new HoA extends the existing commitment that uncontracted gas (spot cargoes) will not be offered to the international market unless equivalent volumes of gas have first been offered with reasonable notice on competitive market terms to the Australian domestic gas market.

The ACCC has found on eight consecutive occasions that there was no shortfall in the domestic market.

APPEA Chief Executive Andrew McConville said, as confirmed by both the ACCC and International Gas Union, Australian domestic gas prices are lower than prices paid by Asian customers for Australian gas.

“Individual prices offered to domestic gas users will continue to be internationally competitive and have regard to the producer’s cost of supply and factors that may be relevant to users’ individual circumstances, including the terms and conditions of their gas supply agreement and any applicable transportation or retailer charges,” Mr McConville said.

Mr McConville said the industry appreciated the common-sense approach of the government in working with industry to finalise the HoA through to 1 January 2023.

“The Heads of Agreement reflects our sector’s ongoing commitment to the domestic market but importantly recognises the investment scale afforded by international contracts."

“The answer to ensuring competitive gas prices in Australia on an ongoing basis is more supply and more suppliers – and developing gas resources closest to local markets."

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