The eastern Australian gas market is experiencing a period of significant transition with the development of coal seam gas (CSG) resources and the associated creation of an east coast Liquefied Natural Gas (LNG) export industry, according to a new study released by the Department of Industry and the Bureau of Resources and Energy Economics.

The Eastern Australian Domestic Gas Market Study was initiated in the context of the domestic gas market rapidly expanding in response to the advent of LNG export projects on the east coast and the associated uncertainty surrounding the outlook for supply and demand. The study was designed to help address information gaps and inform debate on strategy for gas policy. In particular, this work and continued engagement with stakeholders will inform the Eastern Australian Gas Supply Strategy to 2020 and the government’s Energy White Paper.

The dominant issue that underlies the discussion, analysis and range of policy options presented in this study is the transition of the eastern gas market from being solely domestic to one that is export linked. The report suggests that the scale and duration of this change is likely to have profound effects on market participants, especially if impediments to supply or other constraints are imposed on the market’s ability to respond to the challenge of future market dynamics.

Understanding this transition and its implications for the eastern gas market requires understanding of the market’s key components – supply and demand, infrastructure, and the nature and role of trading mechanisms. This study examines each of these components and in doing so reveals several broad themes that relate to the need for the market to:

  • provide sufficient and timely gas supply to meet expanded demand
  • provide more transparent information in both the upstream and downstream sectors
  • develop arrangements and mechanisms that facilitate its ability to meet the changing needs of participants and smoothly respond to future change.

The full report is available to view here

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