The Albanese Government has brokered a new deal with gas giants Woodside and Esso. 

The arrangement should increase domestic gas supplies to Australia’s east coast's energy market, in exchange for allowing these companies to surpass the established price cap.

The accord was created to allow Woodside and Esso to supply an additional 260 petajoules of gas to the domestic market. 

This supply is anticipated to primarily benefit power generators and large enterprises, although the direct impact on consumer gas or electricity bills remains minimal and somewhat indeterminate.

The agreement represents the second phase of commitments under the Government's Gas Market Code, initiated last year, aimed at regulating the gas market to ensure fair pricing and adequate supply.
The announcement follows commitments made by Senex and APLNG announced in November 2023, and brings the total volume of gas secured through the Gas Market Code commitments to 564 PJs.

The code previously set a cap of $12 per gigajoule for gas prices, but with provisions for exceptions, allowing suppliers to charge above this limit if they commit to prioritising the domestic market.

Energy Minister Chris Bowen and Resources Minister Madeleine King have lauded the deal, saying it will help secure gas supplies up to 2033. 

The volume of gas covered by the deal is enough to power all east-coast gas-fired power stations for two and a half years.

The government and gas sector say these supplies are crucial for maintaining stable energy prices and supporting the grid's reliability as the transition to renewable energy sources progresses.

The backdrop to this agreement includes a contentious debate around the Gas Market Code. 

The Coalition has criticised the code for what it sees as excessive government intervention, while the Greens have supported the price cap but expressed concerns over the exemptions granted.

Experts have noted that while these exemptions may address supply shortfalls, their impact on household energy costs is uncertain. 

The effectiveness of additional gas supplies in moderating prices is contingent upon the prices at which this gas is made available and the logistical challenges of transporting gas across regions.