Australia proposes to extend gas security policy until 2030

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SYDNEY, July 5 (Reuters) - The Australian government on Tuesday proposed to extend its gas security policy until 2030 to ensure the mechanism is available to help reserve domestic gas to prevent a supply crunch that would cause wholesale power and gas prices to rise.

The extension would ensure the availability of the so-called Australian Domestic Gas Security Mechanism (ADGSM) while checks are made to improve the existing process, Resources Minister Madeleine King said.

"The current ADGSM is a complex mechanism that would, if invoked, take a long time to produce results," King said in a statement.

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The current domestic gas security mechanism requires east coast suppliers of liquefied natural gas (LNG) to hold back some exports for the domestic market but the trigger would not help solve immediate shortages as it involves an annual review. read more

The mechanism, designed by the previous government to consider annual balances of supply and demand, also requires prior consultations with industry and regulators.

Last month, Australia's energy market operator took the unprecedented step of suspending the electricity spot market across eastern Australia to ensure it could keep the lights on, amid a string of outages at coal-fired plants and record high global coal and gas prices. read more

But the government did not invoke the gas security trigger saying that would not provide any relief straight away.

King said the government will hold meetings with Australia's major gas suppliers as well as key international counterparts as it opens public consultations on extending the ADGSM, due to expire on Jan. 1, 2023.

The current consultation is on the extension of the existing ADGSM as required by law.

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Reporting by Renju Jose; Editing by Christian Schmollinger

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