Shell Plc announced on Monday that its QGC business, which develops methane reserves in Queensland, planned to provide an additional 8 petajoules (PJ) of gas for the Australian market for delivery in 2023.
Following the passage of legislation by the Australian government that established a natural gas price cap and which will be applicable to new wholesale gas sales by east coast producers for a year, Shell made its offer.
Suppliers in Australia’s east coast market, including Exxon Mobil Corp (XOM.N) and Shell, fiercely opposed the price cap provision, which was set at A$12 ($8.40) per gigajoule (GJ).
Analysts and gas producers have warned that the new law will disrupt the market, and producers have already withheld supply offers as they evaluate its effects.
The volume is in addition to the 20 PJ of domestically offered gas that has been priced at or below A$12 per GJ since December 2022, of which over 13 PJ have been contracted, according to Shell.
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