Gas shortage threatens existence of the largest wool factory in Australia

The largest wool manufacturer in Australia may have to close its doors due to shortage of gas. The company failed to acquire a natural gas deal. It may be forced to put 40 people into unemployment.

Suppliers informed Victoria Wool Processors that they won’t be able to fulfil its business demands for next year. It needs 110,000 gigajoules of gas to heat and treat the 12,000 tonnes of greasy wool the firm produces every year, reported the ABC. Its present contract with Australia Energy ends by the end of this year.

The firm also said that it is not big enough to buy gas as wholesale. The quotes retailers offered are double the current price that will make the company unviable, said David Richie, the company’s general manager. Australia Energy, the current supplier of gas to Victoria Wool Processors, also revealed in a statement that there exists a gas shortage. The current condition makes it hard to get supplies.

The ABC reported in August that price of gas in Australia is double that of its export. The report called it a paradox, the largest exporter of gas with domestic shortage. It continued to say that it is the $200 billion investment in liquefaction and shipping facilities that made Australia the largest gas exporter. But this bonanza created its shortage in the domestic market. At present, Asia can get gas at half the price of what Australian local businesses pay for it. With laws banning gas development in the country, suppliers are taking fuel from the domestic market. It is this situation that led to the current exorbitant price, the report added.

This uncertain price will lead to unemployment, experts predict. Many of the manufacturers are closing their onshore plants to focus in its offshore ventures.

Victorian Energy Minister Lily D'Ambrosio in the meantime said that there is no shortage of gas. The price rice happens because Australia is exporting gas globally for the first time from Queensland.