Shell pauses big domestic gas sale over ‘short sighted’ price cap plans
Shell’s QGC LNG has paused a tender for 50 petajoules of gas to the domestic market after the Federal Government’s intervention into the market.
The QGC LNG project, near Gladstone
The Albanese Government has proposed a gas and coal price cap to lower energy bills, a move which spooked the market and has led to a big sell-off of energy stocks.
Shell’s QGC operations in Queensland said it had an expression of interest tender process in the market for 2023-2024, but had paused the offering while it assessed the impact of the Governments plans.
The Queensland Resources Council has also warned the Government’s intervention would not end well and had been responsible for a $1.5 billion loss on the market from energy stocks.
“The only thing that short sighted and misguided strategies like price caps and tax increases will reduce is the incentive for energy companies to invest in new projects for Queensland,” QRC chief executive Ian Macfarlane said.
But Energy Minister Chris Bowen has warned energy companies their profits should not come at the expense of their customers.
Parliament would resume on Thursday to debate the Government’s energy price relief plan, which will include capping gas at $12 a gigajoule for 12 months and coal at $125 a tonne in NSW and Queensland.
The plan will also see a mandatory code of conduct for gas retailers, which will regulate the supply and purchase of gas.
“Gas companies want to maximise their profits. That’s their job,” Bowen said.
“We have a different job. Our job is to protect the Australian people.
“We will not see Australian industries close at the expense of gas company profits – we just won’t. Gas companies are entitled to protect their profits but not at the expense of Australian industry and Australian households.”
Bowen hit out at Shell’s announcement that it would suspend its role in the gas supply arrangement.
“They can make as much profit as they want doing that but Australians have a right to this gas at a fair price,” he said.
Macfarlane said the gas majors, including Shell, APLNG, Santos and Arrow had invested billions of dollars in Queensland over decades and have all said the price cap would negatively impact their operations and their plans for the future.
“The Government needs to be aware of the damage a gas price cap will have on jobs across the Darling Downs through to Gladstone, along with nearly 2500 local businesses and contractors the gas industry supports.”
Additional reporting: AAP