Australian minister assures Japan of gas and coal supplies

Australian Resources Minister Madeleine King said the government’s measures to curb rising domestic energy prices would not disrupt gas and coal supplies to Japan amid concerns they would limit the resource-rich nation’s energy exports.

In a recent interview with Kyodo News ahead of a Sunday-Thursday visit to Japan, Kim said the government was considering any intervention in the LNG market that would not affect exports and long-term contracts.

“We are determined that we will ensure that these solutions do not affect gas or coal supplies to Japan,” Kim said, adding that Australia is “committed to ensuring that these exports remain on track.”

Australia is the world’s largest exporter of natural gas by 2021, and Japan, which relies on Australia for 40% of its LNG, is its largest supplier.

During his stay in Japan, Kim will meet with a number of government and business representatives, including Japanese Minister of Economy, Trade and Industry Yasunori Nishimura. She will also visit Kobe to visit the Suiso Frontier, the world’s first liquefied hydrogen carrier.

That assurance comes from a domestic gas price crisis in Australia, as the country’s ageing coal-fired power plants begin to go offline, and as global LNG spot prices surge due to the ongoing war in Ukraine.

Lawmakers have called for intervention in the gas market to limit price increases for domestic gas, such as price caps or windfall profits taxes, as producers see record profits amid soaring global demand.

The government has not confirmed what measures it is considering.

Despite Australia being one of the world’s largest gas producers, Australians have also been warned of an expected gas shortage on the country’s east coast next year.

Experts, however, dismissed claims of gas supply issues, pointing instead to Australia’s high exports compared to domestic consumption.

The Australian Institute, a public policy think-tank, said in June that the study showed “no gas supply problems in eastern Australia, with Australian households and industry dwarfing the gas produced for export”. Note that about 80% of Australia’s natural gas is exported.

While King ruled out export curbs on gas in 2023 following a deal with local gas producers, she said it remained an important option for Canberra to ensure energy security in the event of future shortages.

Despite the ongoing energy crisis, King also ruled out introducing nuclear power into Australia’s energy system, saying it was “not on the negotiating table” under the current Albanian government.

“We don’t support the introduction of nuclear power…because we do have reliable energy sources that can power this country for many years to come,” King said, adding that Australia would turn to its “other great natural assets” along with As the country transitions from fossil fuels to renewable energy sources such as offshore wind and solar.

© Kyodo News

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