Australia commits $45 million to boost gas supply

The Australian government said on Friday it will commit A$58.6 million ($45.3 million) to boost gas supply, storage and pipeline capacity in its 2021-22 budget, due to be unveiled on May 11.

The spending fits with the government's push for a gas-fired economic recovery from the COVID-19 pandemic slump, aiming to boost gas supply, drive down prices for manufacturers and avert a looming shortfall in the country's southern states.

"The government will not sit back and allow the shortfall to eventuate – the risk to the economy is too great," Energy Minister Angus Taylor said in a statement.

The projects the government will back in the budget include a gas-fired power station proposed by mining billionaire Andrew Forrest, tied to a gas import terminal that his privately owned Squadron Energy plans to build in the state of New South Wales.

Squadron's Port Kembla LNG (liquefied natural gas) import terminal is the most advanced project among five LNG import terminals proposed to help fill a looming gas shortfall in Australia's southern states.

Other measures to win support include two gas storage projects in the state of Victoria and an expansion of the South West Victorian gas pipeline.

The funding is designed to help the projects reach final investment decisions more quickly so they can be built in time to address potential gas shortages.

"Without action to address supply, industry and households will be faced with higher prices, disruptions in supply and unplanned outages," Taylor said.

($1 = 1.2932 Australian dollars) (Reporting by Sonali Paul; editing by Richard Pullin)