CDN NEWS | 
US NEWS 
- Shell says windfall taxes risk deterring future gas investment
- Australia’s LNG export revenues set to surge on supply shock
SYDNEY, March 31 (Reuters) – Shell (SHEL.L) has warned Australia against introducing a windfall tax on gas exporters, saying such a move would deter investment and undermine energy security as LNG prices surge following disruption to global supplies caused by the Iran war.
Australia became the world’s second-largest LNG supplier after Iranian strikes forced Qatar to halt production, with its export revenue set to surge due to lower supply caused by the conflict.
Canberra is reportedly weighing options to capitalise on the higher prices, with Prime Minister Anthony Albanese asking the Treasury department to model a new tax on LNG exports and suggest reforms to the Petroleum Resources Rent Tax (PRRT).
Cecile Wake, chair of Shell Australia, which exports gas from the Queensland Curtis LNG project in the state of Queensland, warned against “short-term fixes” in response to the energy crisis.
“At times like this, there is increased risk that strong and stable policy settings are sidelined by short‑term measures or populist rhetoric,” she said in remarks to the Australian Domestic Gas Outlook conference released on Tuesday.
POTENTIAL IMPACT OF PROPOSED POLICIES
The proposed policies would “erode project values and render many of Australia’s future growth opportunities uneconomic and uncompetitive compared to global alternatives,” she said.
She said high commodity prices “already flow through to Australians through higher corporate income tax and PRRT receipts.”
Asia spot LNG prices have doubled to three-year highs since the conflict in Iran began in February. Profits earned on long-term contracts linked to oil prices, which make up 75% of Australia’s export shipments, are also expected to surge in three to six months.
Australia shipped A$65 billion ($44.5 billion) in LNG exports last year, but gas producers have long been criticised for their low tax payments under rules that let them recoup construction costs before paying tax.
($1 = 1.4603 Australian dollars)
Reporting by Christine Chen in Sydney Editing by Bernadette Baum
Share This:
