Sonali Paul

MELBOURNE (Reuters – The collapse of a gas seller in eastern Australia that provided 7% of its market was due to soaring prices. It is the first casualty from the international gas supply crisis triggered by the sanctions on Russia’s invasion of Ukraine.

Weston Energy, a private gas retailer suspended by the Essential Services Commission from the wholesale market because it failed to satisfy financial security requirements. According to the commission’s statement on Tuesday, Weston Energy would move its large and medium-sized customers to another supplier.

As Australia’s Labor government pushes for rapid expansion of renewable energy, it underscores the energy price worries that will face them.

Garbis Simonian (Weston Energy) stated that gas prices nearly tripled due to Russia’s invasion of Ukraine. Moscow called it a special military operation.

The demand for natural gas-fired electricity has increased due to recent outages at Australian coal plants.

Simonian released a statement saying that rapid rising energy prices had put at risk hundreds of Australian businesses, and thousands of job opportunities.

According to Weston, the unprecedented price surge meant that Weston could not manage cash flow in its trading business.

Weston Energy has collapsed, as well as Australia’s No.2 Independent Gas Producer Santos Ltd. Santos Ltd had identified Weston in its bid to purchase 4% of the 75 petajoules of annual gas production at Narrabri.

Santos had no immediate comment on Weston’s collapse.

Santos intends to drill appraisal holes at Narrabri in the new year. This project could provide enough gas to supply half of New South Wales’s demand. The company hasn’t yet set a timeline for the final investment decision in this long-delayed venture.