Global Gas Crunch Claims Australia’s First Trading Victim


Melbourne — Gas distributors, which supplied 7% of the eastern Australian market, have collapsed due to soaring global gas prices. This is the first serious casualty in the country due to the global gas supply crisis due to sanctions on Russia for the invasion of Ukraine.

On Tuesday, the Essential Services Commission said that private gas retailer Weston Energy would shut down from the wholesale gas market as it did not meet financial safety requirements, and its 184 large and medium-sized customers would be transferred to other suppliers. Stated.

The collapse of Weston Energy highlights energy price concerns facing Australia’s new Labor Party administration. This is because they are rapidly expanding renewable energy to replace gas and coal in the next eight years.

Galvis Simonyan, managing director of Weston Energy, said gas prices have nearly tripled since the beginning of the year due to Russia’s invasion of Ukraine, which Moscow calls a “special military operation.”

At the same time, the recent shutdown of Australia’s coal-fired power plants has increased demand for gas-fired power.

“The rapidly rising energy prices endanger hundreds of Australian companies and thousands of jobs,” Simonian said in a statement.

He said Weston was unable to control the cash flow of its trading business due to unprecedented price hikes.

The collapse of Weston Energy also hit Santos Ltd, Australia’s second independent gas producer. Santos Ltd listed Weston as a potential customer for 4% of the 75 petajoules of gas it plans to produce in the Narrabri project annually.

Santos did not immediately comment on Weston’s collapse.

Santos plans to drill a valuation well this year at Narrabri, a project that can supply enough gas to meet up to half of New South Wales’ demand. There is no time frame for final investment decisions for long-term delayed projects.

Sonari Paul

Reuters

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