Although Australia is one of theworld’s largest producers of gas,massive volumes of production from Queensland’s gas fields are locked into long-term export contracts to LNG buyers,while several gas fields that have supplied southern markets from the Bass Strait for decades are entering rapid decline without new projects to replace them.
By 2027,gas users in Victoria,NSW and South Australia would face yearly gas supply deficits unless new gas supplies were made available,AEMO has warned.
Conservation groups,including Environment Victoria,insist the forecasts leave ample time for governments to enact strategies to slash gas demand,such as switching gas heaters to electric and banning new residential gas connections,rather than lifting supplies of harmful fossil fuels that emit carbon dioxide into the atmosphere and contribute to the worsening climate crisis.
However,with more than 2 million gas-connected homes and businesses in Victoria alone,there are concerns that time is running out.
Rick Wilkinson,chief executive of energy consultancy EnergyQuest,said the east coast market was on track to be running short by the end of the decade,or possibly much sooner,depending on whether new sources of gas production or shipping terminals enabling LNG imports from other parts of Australia or overseas became available.
He expected there would be a level of “inertia” for gas projects that had been nearing final investment decisions but stalled when the federal government’s market intervention was first announced,such as OP3D.
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“Senex’s decision on Atlas and Cooper’s decision on OP3D should be watched closely,” he said. “If these projects don’t proceed quickly,a downside risk for supply will have materialised.”
In a joint statement,Treasurer Jim Chalmers,Energy Minister Chris Bowen,Resources Minister Madeleine King and Industry Minister Ed Husic said the code would ensure gas was available for Australian users at reasonable prices,give producers the certainty they need to invest in supply and help to ensure Australia remained a reliable trading partner.
The government said gas producers had already made supply offers of at least 260 petajoules – the equivalent of about 40 per cent of typical east coast annual demand – out to 2027. “These indicative commitments will reduce the risk of shortfalls as assessed by the ACCC and AEMO,” the ministers’ statement said.
Woodside Energy,which operates Victoria’s Gippsland Basin oil and gas fields in a joint venture with ExxonMobil,welcomed the release of the code of conduct and said it was reviewing the detail.
“Woodside remains committed to investigating all available options to maximise supply of gas to the eastern Australian market,including opportunities for LNG imports,” a spokesperson said.
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