One of the world’s largest suppliers of liquefied natural gas (LNG) is considering curbs on exports, which could exacerbate the global energy supply crunch.
Australia’s watchdog has urged the country to bring in restrictions amid coal-fired plant outages and rocketing domestic demand for heating, warning the country could face a shortfall and power soaring prices next year.
The Australian Competition and Consumer Commission (ACCC) warned extra gas is needed to offset declining output at offshore fields that have long supplied the populous east coast, home to nearly 90 per cent of Australia’s population.
As it stands, Australia is competing with Qatar and the US as the world’s top LNG exporter.
Resources Minister Madeleine King said she would consult with LNG exporters and Australia’s trading partners before making a decision in October.
While Europe does not import vast quantities of Australian LNG, the ruling could drive up prices over the coming months for worldwide consumers already roiled by gas disruptions following Russia’s invasion of Ukraine.
Europe is currently scrambling for alternative suppliers after Russia cut gas flows via the Nord Stream pipeline to 20 per cent and is vulnerable to further wholesale price hikes if there is volatility in other markets.
Kremlin spokesperson Dmitry Peskov has said there is little Russia can do to resolve the current crisis – citing problems with the turbines and maintenance, which Russia has justified for heavy supply cuts alongside Western sanctions.
He said: “There are no additional comments. Gazprom has described the real state of affairs: there are breakdowns that require urgent repairs and there are certain problems induced by artificial hindrances, i.e. the illegal sanctions and restrictions,”
Deputy Chairman of the Gazprom Management Board Vitaly Markelov revealed the route for transportation of a gas turbine engine for Nord Stream from Canada had been altered and the asset faced the risk of sanctions by the EU and UK.
Markelov believes it happened because the engine was routed to Germany instead of directly to Russia and now the company, seeking to receive the repaired engine, needs a sanctions waiver guarantee not just from the EU and UK alongside Canada.
The turbine’s manufacturer, Siemens Energy, has revealed it had no access to the turbines on site and had not received any damage reports from Gazprom and so had to assume the turbines were operating normally.
The EU has accused Russia of energy blackmail, and has dismissed the concerns over the turbine as a pretext for cutting off gas flows, with the turbine not even required for the pipeline until later this year.