Australia's oil and gas lobby has blasted the Albanese government's "heavy-handed" energy market intervention, claiming the legislation had "dealt a blow" to new east coast domestic supply and security.
Senex Energy on Thursday announced it would suspend plans for a $1 billion expansion of its Surat Basin developments due to the federal government introducing a mandatory code of conduct for the wholesale gas market.
"Until we know the scope of future government actions under the yet-to-be-developed code of conduct, and the potential for retrospective application of measures, including the breaking of agreed contracts, it is prudent to review all investment," Senex chief executive Ian Davies said.
The company's expansion of its Atlas and Roma North natural gas developments is expected to create hundreds of jobs and pump more than $200 million into local businesses, while bringing new gas to the east coast market.
The Australian Petroleum Production and Exploration Association said Senex Energy's decision proved the government's "radical" intervention was risking future investment.
"No new gas supply means no downward pressure on prices and an increased risk of future gas shortages," APPEA chief executive Samantha McCulloch said.
"This decision by Senex Energy is exactly what the industry warned of when the government decided to take unprecedented, permanent control of the gas market and regulate the rate of return for these investments."
The government's energy relief measures which passed the parliament last Thursday, cap gas at $12 a gigajoule, introduce a mandatory code of conduct for the gas market and roll out power bill support for welfare recipients.
Responding to criticism from the gas industry over the federal government's cap on coal and gas prices, Energy Minister Chris Bowen said he didn't accept they could charge "whatever they wanted" to make "mega profits" off the war in Ukraine.
"We will not allow mega profits for gas companies off the backs of Australian industry," he told ABC Radio on Thursday.
"We would have seen Australian industries fold next year in the absence of government response, now we're not going to let that happen."
In a joint statement, Nationals leader David Littleproud and opposition resources spokeswoman Susan McDonald expressed their disappointment at Senex Energy's announcement.
"This decision is a serious consequence of Labor's control over gas, for failing to back our gas industry and putting unrealistic ideology ahead of the practical reality of the need for energy," Mr Littleproud said.
Mr Bowen said claims of a "magical gas-led recovery" as a solution to the energy crisis were "always a fraud".
NSW Energy Minister Matt Kean has defended his government's legislation to cap the price of coal to help ease pressure on households managing soaring power bills.
Queensland Premier Annastacia Palaszczuk said she had expressed her support a number of times for a gas pipeline from the Bowen Basin to help address supply issues in NSW and Victoria.
