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Home News

Report: gas outlook improved to 2026

by Imogen Hartmann
March 30, 2021
in Gas, News, Projects, Spotlight
Reading Time: 5 mins read
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In its latest Gas Statement of Opportunities (GSOO), the Australian Energy Market Operator (AEMO) has found Australia’s gas supply will remain secure until 2026, with new gas projects vital for Australia’s overall supply.

AMEO forecasts an improved outlook for gas supply until at least 2026 across the eastern and south-eastern gas systems, if committed field developments and pipeline expansions proceed as planned, with operation of the Port Kembla Gas Terminal (PKGT) commencing before the 2023 winter.

AEMO’s GSOO highlighted southern supply risks for winter 2023 if PKGT is delayed and certain conditions emerge, such as a 1-in-20 maximum winter daily demand in Victoria, coincident peaks across southern regions, power-system events significantly increasing gas-powered generation of electricity, or gas production outages.

AEMO Group Manager, Forecasting, Nicola Falcon, said the announcement of the Port Kembla Gas Terminal, Australia’s first LNG import terminal, has improved supply capacity with an estimated injection of up to 500TJ per day.

“This development comes at a critical time, as existing Victorian production is declining faster than previously projected,” Ms Falcon said.

“Our annual analysis shows that without the Port Kembla Gas Terminal, the decline in flexible gas from existing fields would mean we need to rely heavily on storage, and increasingly on constrained pipeline infrastructure to meet the needs of gas consumers, especially during high demand days in winter.”

AEMO’s GSOO – developed using reserve and forecast information from gas producers and industrial gas users – also highlights that the gas sector is on the cusp of transformation, with changes in consumption patterns forecast and alternate supply sources being actively developed.  

“Australia’s energy sector is going through a rapid transition, driven by changes in consumer behaviour and efforts to decarbonise the system,” Ms Falcon said.

“This report recognises the potential of electrification, fuel switching to hydrogen, the Australian Government’s vision for a gas-fired recovery and LNG imports to all influence investment opportunities in the gas sector.

“Investments to address forecast supply gaps in the second half of this decade need to consider the transformation underway and be adaptable to manage changes in gas consumption.

“There are a number of initiatives at both Commonwealth and state government levels that could change the market and impact the outlook described in the report, including proposals to drive more gas into the system.”

The National Gas Infrastructure Plan (NGIP) being developed by the Federal Department of Industry, Science, Energy and Resources (DISER) is considering a number of pathways to unlock gas supply and improve efficiency in the east coast gas market.

Federal Government doubles down on gas-fired recovery

Minister for Energy and Emissions Reduction, Angus Taylor, said the government is committed to a gas-fired recovery that will see Australian gas working for all Australians.

“We have been taking action to help secure the gas supplies that are vital to our economic recovery to avoid potential shortfalls and price hikes,” Mr Taylor said.

“The supply of reliable, affordable gas will keep downward pressure on energy prices and the lights on for Australian businesses and households.

“Gas will be even more important as Australia continues to be a world-leader in the renewables sector, with one in four Australian households having solar installed.”

Minister for Resources, Water and Northern Australia, Keith Pitt, said the government has a detailed plan to ensure more gas supply.

“Our Strategic Basin Plan announced last year will prioritise five areas for development with real potential to deliver more gas into the domestic market, beginning with the Beetaloo Basin in the Northern Territory,” Mr Pitt said.

“I recently announced the guidelines for a $50 million grants program that will encourage and speed up exploration in the Beetaloo and that means more jobs sooner and more major investment sooner.

“We will identify, and progress, other basins with major gas reserves providing further economic opportunities, particularly in regional areas.”

AEMO reported that proposed pipeline expansions, storage projects and new basin developments could further improve the resilience of Australia’s domestic gas system, along with an import terminal.

The NGIP, announced as part of 2020’s Federal Budget, will consider such projects and map pathways to avoid short-term shortfalls.

Investment settings critical

APPEA Chief Executive, Andrew McConville, said Australia’s natural gas industry was more essential than ever to support Australia’s economic recovery and ensure secure energy supplies are maintained to households, businesses and industry across the nation.

APPEA members are taking all steps necessary to ensure the production and delivery of gas supplies continues, be it from new gas supply agreements to local companies or massive new projects such as the West Barracouta project which will bring much-needed new gas supply to the Australian east coast domestic market in 2021.

“Natural gas is an economic and environmental strength for Australia,” Mr McConville said.

“Not only can it deliver jobs, it is also critical to reducing emissions both in Australia and in our region, through replacement of coal, as a feedstock for hydrogen and in support of more renewables.

“The investment window is there, but it can only be met through the right regulatory and policy environment.”

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