A COALITION government would develop a "reservation" policy for some new gas fields to boost supply for the domestic market amid growing concern about pressures on local gas prices from burgeoning export contracts.
While firmly ruling out any retrospective action on existing projects, opposition resources spokesman Ian Macfarlane said a new policy to be developed in government would ensure there is "sufficient gas for local supply".
"And it's got to be at a fair price," he told The Australian.
AGL chief executive Michael Fraser said the new liquified natural gas plants in Gladstone were like a giant vacuum cleaner "hoovering up" all the available gas and forcing up prices.
Mr Fraser has already foreshadowed an increase in supply prices from $4 a gigajoule to "a price regime of $6 to $8".
Mr Macfarlane said he was aware of some contracts hitting $19 a gigajoule in Western Australia. These price pressures will intensify in the next couple of years when some of the major supply contracts for local utilities expire. Gas utilities would have to renew contracts at much higher prices, before passing on these increases to local businesses and households. He warned that NSW faced severe constraints in coming years and the state government could find itself "backed into a corner".
The Australian
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