Gas focus welcome but Incitec Pivot Limited calls for further intervention

Incitec Pivot Limited welcomes the Federal Government’s focus on gas production but is calling for more intervention to create a functional domestic gas market to support Australian jobs and the economy.

Managing Director and CEO Jeanne Johns said: “We welcome the Prime Minister’s comments that more gas production is needed, and that Australia’s gas is vital in the transition to clean energy sources."

“Australia is a gas rich nation and it’s only natural that Australians should benefit from this through lower energy costs and jobs, including in manufacturing, where energy costs are critical, and gas is often an essential feedstock. 

“To make this a reality, the domestic gas market needs to return to affordable, internationally competitive pricing. While more gas supply is key, intervention is needed to ensure the domestic market benefits,” Ms Johns said. 

In order to restore a functioning east coast gas market, policy interventions are necessary to support domestic gas consumers, including Incitec Pivot – one of Australia’s largest industrial gas users.

“We are calling on the Federal Government to modify the Australian Domestic Gas Security Mechanism (ADGSM) to include a price trigger, as an indicator of insufficient domestic supplies,” Ms Johns said. 

A ‘use it or lose it’ mechanism, to guarantee gas reserves are developed in a timely manner and not banked for future LNG exports is also needed.

“We welcome the Federal Government’s moves to establish a prospective national gas reservation policy." 

“Without immediate policy action, existing manufacturing jobs across Australian cities and regional communities are at risk, not to mention future investment and job creation.”

Ms Johns said while there had been recent reductions in the gas spot price, this did not benefit large users in the manufacturing industry.

“The latest spot prices are not reflective of higher prices locked in and being offered for longer term contracts. The industry needs to see a return to long term, secure gas supplies at affordable prices,” Ms Johns said.

ENDS