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 market that is actually working well," Shell Australia's chairwoman, Cecile Wake, said at an industry event in Australia, as quoted by Reuters. The proposal for building a domestic gas reserve was first tabled in May this year, in response to worry about looming gas shortages in parts of the country, notably the east coast. The east coast of Australia is particularly vulnerable to supply shortages. Last year, the country's competition regulator warned the market could swing into a deficit by December. Originally, the rules stipulated that producers should reserve 20% of output for the Australian market.