Shell Slams Australia's Plan to Force LNG Producers to Supply Domestic Market
Shell has spoken out against a plan by the Australian government to ensure domestic gas supply by mandating LNG producers to reserve certain volumes of their output for domestic use. “Fundamentally, it's a sledgehammer to crack a nut. And it is an extraordinarily heavy-handed intervention into a mar
Source: OilPrice.com
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DW NOTE
Shell objects to compulsory domestic supply because it signed twenty-year contracts to send Australian gas to Asia at higher prices. When a government lets foreign companies lock up a national resource for export, then discovers its own market is short, the producers call intervention "sovereign risk." They mean: honouring export contracts to Tokyo matters more than keeping the lights on in Adelaide.