Australia gas producers hopeful proposed rules will not harm investment

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SYDNEY, March 21 (Reuters) – Australian natural gas producers are cautiously optimistic a raft of proposed rules for the sector will not stunt investment as the government prepares to unveil the final details of several major interventions into the domestic gas market.

Consultations over powers that would allow government to divert exports to the domestic market are constructive, said Mark Abbotsford, executive vice president at Woodside Energy (WDS.AX), the country’s biggest independent gas producer

“I do think we can land on a suite of measures that ensure a functioning market and a positive investment climate,” said Abbotsford at the Domestic Gas Outlook Conference in Sydney on Tuesday.

Cautious optimism from industry follows months of warnings from producers that a raft of new rules, including powers to redirect exports and set prices as well as a mandatory code of conduct, would imperil long-term contracts, stop new investments and alienate trade partners.

With consultation still underway, Prime Minister Anthony Albanese said earlier this month that natural gas had an important role to play in the transition to renewables.

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Andrew Thornton, Executive General Manager at power producer Origin Energy (ORG.AX), which has a 27.5% stake in the Australia Pacific LNG project, told Reuters he was “confident” government understood industry’s perspective and any risks to investment.

In a pre-recorded message to the conference, Resources Minister Madeleine King thanked industry for constructive input and said Australia remains a stable investment environment.

“Recent engagement shows government is interested in working with industry to help bring new supply online,” said Stephen Harty, Chief Executive at Gladstone LNG, a joint venture between Santos (STO.AX), Malaysia’s Petronas (PETRA.UL), TotalEnergies (TTEF.PA) and Korea Gas Corp .

Australia, which vies with Qatar and the United States as the world’s biggest liquefied natural gas (LNG) exporter, temporarily capped domestic prices for gas and coal in December for twelve months to curb soaring prices.