Allocating an Authority to Prospect over some Surat acreage to...

Allocating an Authority to Prospect over some Surat acreage to CTP will increase domestic supply if it finds commercial gas. The same cannot be said of Shell/Santos and their underemployed chillers.

This is just not true. Assuming every competing party is financially and technically able to carry out development, the effect is the same regardless of who it goes to.

Shell and Santos may have underemployed chillers (though Shell's aren't likely to remain that way with the development of Arrow's Surat acreage) but if they're awarded a PL for domestic reservation that gas will go to the domestic market - if it doesn't, the Qld government will quite rightly strip them of the permit for violating the conditions under which it was issued. As someone who has worked on these domestic reservation gazettals I can assure you of that - not that it would ever get to that point because I can also assure you that the LNG projects are far too aware of the importance of their government compliance relationships to risk it over something so stupid as bidding for a comparatively minor domestic reservation permit and then illegally shipping it overseas.

The argument about LNG producers buying up other third-party gas if they are given the domestic permit but this not occurring if CTP gets the permit is also just plain wrong. The effect on the market is the same regardless of whether CTP produces and sells to the domestic market from the reservation permit or Shell does it. The same volume of gas is still reserved for domestic use in either case, and the same volume of non-reserved gas from the wider gas market is available in each case too. The supply/demand and price points don't change. So if the LNG producers are buying up third-party gas on the market they will be doing it regardless of who wins the domestic permit.