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Australia plans LNG export limits

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Reuters are reporting that Australia's government has proposed a plan to restrict exports of LNG at times when domestic shortages push up local prices.

The Australian Domestic Gas Security Mechanism is aimed at ensuring the domestic price of gas is affordable and reflects global export prices.

The proposal follows two rounds of meetings between Prime Minister Malcolm Turnbull and producers and the Australian Energy Market Operator to discuss a domestic gas crunch.

Under the plan, Australia's resources minister would have the power to impose controls on LNG exports based on advice from the market operator and regulator.

The Australian Energy Market Operator warned in March of a shortage set to hit eastern Australia just as the country becomes the world's top LNG exporter.

At least one of the east coast LNG plants, Gladstone LNG (GLNG) is drawing gas out of the domestic market to help meet its export contracts.

Companies including France's Engie SA and Origin Energy have sealed deals to ensure gas supply to power plants at peak times, easing some short-term concerns about shortages that have already helped to trigger blackouts.

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