The Australian Energy Market Operator has released the 2015 Gas Statement of Opportunities (GSOO), which suggests that there will be no supply gaps forecasted to 2019.
Lower than forecast consumption levels, most notably in the industrial sector within Queensland and New South Wales, combined with upgrades to gas market infrastructure, have alleviated short-term supply gaps that were initially forecast by AEMO in its previous GSOO update in mid-2014.
The 2015 GSOO reports on the adequacy of eastern and south-eastern Australian gas markets to supply maximum demand and annual consumption, as forecast in the 2014 National Gas Forecasting Report (NGFR) published in December.
AEMO Managing Director and Chief Executive Officer Mr Matt Zema, said the shift in supply forecasts illustrates the dynamic, ever-changing natural gas landscape, most notably following the initiation of liquefied natural gas (LNG) exports.
“Australia’s eastern and south-eastern gas markets are experiencing rapid transformational change. The 2015 GSOO points to a 17%* forecast decline in New South Wales’ gas consumption in 2019 and identifies crucial upgrades to gas market infrastructure, such as the commissioning of the Newcastle LNG storage facility,” said Mr Zema.
“A fall in the forecast demand, increased capacity of the Victoria–New South Wales interconnector, and upgrades to the Moomba–Sydney and Moomba–Adelaide pipelines, all reduce the potential for supply gaps in the short term,” said Mr Zema.
The only forecast medium and long-term supply gaps are in Queensland, consisting predominantly of gas powered generation (GPG) supply.
“The forecast medium and long-term supply gaps equate to 214 PJ, down from the 1000 PJ anticipated in the 2013 GSOO, largely due to lower gas consumption forecasts following a reduction in the industrial consumption across eastern and south-eastern gas markets,” said Mr Zema.
The 2015 GSOO also confirms that the Victorian Declared Transmission System (DTS) can supply the maximum forecast 1-in-20-year gas demand of 1,257 TJ per day from 2015–2019.
APPEA states that the 2015 GSOO highlights the need to develop more gas to put downward pressure on prices.
“While it remains clear eastern and south-eastern Australia’s natural gas supply and demand is adjusting to a dynamic and transitioning market, new gas resources must be developed to alleviate pricing pressures for residential, industrial and commercial customers.”
“With demand declining for a number of reasons, including upgrades to gas market infrastructure and storage, now is the time to ensure exploration and development of natural gas is fostered in NSW and Victoria rather than hampered by moratoriums and excessive regulation.”
“Keeping in mind that gas projects take years to reach commercial production, planning for the state’s long-term energy needs remains paramount. Projects in NSW currently in the early stages of development could meet up to 65 per cent of the state’s domestic gas demand.”
The Australian Pipelines and Gas Association (APGA) acknowledges that the Australian Energy Market Operator (AEMO) is no longer forecasting a gas supply shortfall for Australia’s eastern markets.
“However, there must be serious concern that this change is caused primarily by a reduction in demand for gas,” APGA Chief Executive Cheryl Cartwright said.
“A reduction in industrial and commercial demand for gas, particularly in New South Wales, must be of real concern to policy-makers.