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Gas majors seek to avert Australia shortage

ReutersSYDNEY (Reuters) — Australia’s top gas producers, led by ExxonMobil Corp. and Royal Dutch Shell, agreed to boost supply to the country’s domestic market to help avert an energy shortage following crisis talks with Prime Minister Malcolm Turnbull.

Australia is on track to become the world’s largest exporter of liquified natural gas (LNG), yet its energy market operator has warned of a domestic gas crunch from 2019 that could trigger industry supply cuts and broad power outages.

“We are a massive gas exporter. It is utterly untenable — unacceptable — for us to be in a position where domestic gas consumers ... cannot have access to affordable gas,” Turnbull said.

He said the producers had guaranteed to ensure that gas would be available for the national electricity market.

Australia’s power supply problems made international headlines last week when Tesla Inc. boss Elon Musk offered to save South Australia, the country’s most renewable-energy dependent state, from blackouts by installing large-scale battery storage.

The South Australian government on Tuesday outlined plans to spend 510 million Australian dollars (U.S. $385 million) to keep the lights on, including A$150 million to encourage the development of 100 megawatts of battery storage.

Australian manufacturers have long complained of tight gas supplies and soaring prices as producers have focused on supplying gas to LNG plants that have locked in 20-year export contracts. Speech

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