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Australia's east faces immediate gas shortage amid cold snap, outage
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Australia's east faces immediate gas shortage amid cold snap, outage
Jun 20, 2024 6:36 PM

SYDNEY, June 21 (Reuters) - Australia's east is facing a

gas shortage after a cold snap drove up demand for heating and

power while supply dipped due to an extended outage at the

region's main gas plant, the energy market operator said.

To help boost supply, the market operator has asked gas

producers in Queensland state, which include Shell,

Origin Energy ( OGFGF ) and Santos, to send gas to the

southern states.

The Australian Energy Market Operator (AEMO), in a notice

issued late on Wednesday, warned of heightened risks of gas

supply shortfalls during Australia's winter months.

"The supply of gas in all or part of the east coast gas

system may be inadequate to meet demand," the notice said.

Gas demand has surged for power generation at the same time

as heating as the weather conditions have hampered wind and

solar power output, the market operator said.

And demand jumped just as the main gas plant that supplies

the southeastern states, Longford, jointly owned by Exxon

Mobil's ( XOM ) Esso and Woodside Energy ( WDS ), had to cut

production more than forecast for extended maintenance work,

AEMO said.

Australia considers gas a critical element in its transition

to cleaner energy as the country moves rapidly away from its

dependence on coal-fired power stations, and has been reaching

new gas deals to plug the gaps in long-term supply.

But the market operator has been warning about potential gas

shortages, calling for urgent new investment to prevent any

shortfall.

Prime Minister Anthony Albanese said Energy Minister Chris

Bowen would work with the AEMO and the energy industry to manage

gas supply. The market operator held talks with the gas industry

on Thursday, an AEMO spokesperson said.

Shell, Origin and Santos spokespeople did not immediately

respond to requests seeking comment.

"We will work those issues through with AEMO ... this is not

the first time that has been declared," Albanese told ABC

television, but said the country does need more gas in the east.

Australia produces more gas than it needs to meet its

domestic demands, but most supply is contracted for export.

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