South Korean steel giant POSCO International Corp’s 047050.KS unit Senex Energy said it would suspend its A$1 billion ($671 million) investment plan of its Queensland gas project amid the Australian government’s efforts to quell surging energy prices.
In August, Senex announced plans to expand its Atlas and Roma North natural gas projects in Queensland’s Surat Basin. The project could have increased the company’s annual production by 60 petajoules (PJ) per year, representing more than 10% of annual east coast gas demand, Senex said.
“This will result in less gas, electricity shortages, fewer jobs and weaker regional communities that rely on the resources sector,” Senex, the energy firm which is 50.1% owned by POSCO International, said in a statement on Thursday.
Over the past six months, Australia’s labour government has taken extraordinary measures to beef up gas supply and lower coal, gas, and power prices, which soared following Russia’s invasion of Ukraine.
“Because these changes have been brought on so rapidly, we believe our investments are under question until we see the outcome of consultations and the final form of the mandatory Code of Conduct and new laws,” said Jhoon So Jho, chair of Senex and vice-president of POSCO.
The country’s gas industry lobby group, the Australian Petroleum Production & Exploration Association (APPEA), said the government’s reforms had dealt a blow to the new east coast gas supply and future energy security. ($1 = 1.4903 Australian dollars)
