Global gas crunch claims Weston Energy

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Private gas retailer Weston Energy, which supplies 7 per cent of the eastern Australian market, has collapsed due to soaring global gas prices—with news agency Reuters calling it “the first significant casualty in the country from the global gas supply crisis due to sanctions on Russia for its invasion of Ukraine”.

The Essential Services Commission yesterday suspended Weston Energy from the wholesale gas market for failing to meet financial security requirements and said the company’s 184 large and medium-sized customers would be moved to other suppliers.

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The collapse of Weston Energy underscores energy price concerns set to face the new Labor government, as it pushes to rapidly expand renewable energy to replace gas and coal over the next eight years.

Weston Energy managing director Garbis Simonian said gas prices had nearly tripled since the start of the year due to Russia’s invasion of Ukraine. At the same time recent outages at Australian coal-fired plants have driven up demand for gas-fired generation.

“Rapidly rising energy prices have put hundreds of Australian businesses and thousands of jobs at risk,” Simonian said.

With the unprecedented surge in prices, Weston Energy was unable to manage cash flow for its trading business, he said.

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Weston Energy’s collapse has also hit Australia’s second biggest independent gas producer Santos Ltd, which had lined up Weston as a potential customer for 4 per cent of the 75PJ a year of gas it plans to produce at its Narrabri project.

Santos had no immediate comment on Weston Energy’s collapse.

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