PERTH (miningweekly.com) – New data from the Australian Energy Market Operator (AEMO) has found that supply from existing and committed gas developments will provide southern and south-eastern Australia with sufficient resources to meet demand until 2023.
However, the AMEO’s ‘2019 Gas Statement of Opportunities (GSOO)’ found that additional sources of gas supply are required to address a forecast gap in meeting long-term winter gas demand from 2024.
Victorian producers, which produce most of the gas for southern Australia, continue to forecast declining production as offshore gas fields are depleting.
“The immediate actions taken by industry and government in response to our 2017 and 2018 GSOO and VGPR reports have delivered an improved outlook for the east coast gas markets, alleviating concerns of a supply shortfall in the short term,” said AEMO chief system design and engineering officer Dr Alex Wonhas.
“However, southern Australia’s overall supply-demand balance for 2021 to 2023 remains very finely balanced, reflecting the ever-tightening integration of Australia’s electricity and gas markets in the context of an evolving and dynamic energy system,” said Wonhas.
Federal Resources Minister Matt Canavan said on Thursday that more gas from more gas suppliers was the best way to increase competition and lower gas prices in the longer term.
“The GSOO shows east coast gas supplies are sufficient to meet the needs of Australian homes and businesses over the short to medium term, but the long-term supply of affordable and reliable gas will rely on teamwork by all states and territories.
“AEMO’s forecast suggests that in a few years, southern production may decline sharply, which will increase the dependence of gas users in Victoria and New South Wales on interstate supplies, particularly during the peak winter season.”
Canavan noted that states with self-imposed moratoria on exploration and development were effectively locking themselves into a future of importing gas supplies from other sources, which meant added transport costs and dependence on pipeline capacity.
Energy Minister Angus Taylor has strongly urged all state and territory governments to remove blanket bans on conventional and unconventional gas exploration.
“This will help gas customers secure a better deal and reduce the cost of transporting gas while supporting much-needed investment.”
The Australian Petroleum Production and Exploration Association (Appea) said on Thursday that with exploration levels at record lows, the GSOO analysis reinforced how vital it was for all governments to support the development of new gas supplies as quickly and cheaply as possible.
“This requires a focus from the newly re-elected NSW government to support the development of its identified onshore gas resources and ease regulatory burdens to developing that new supply, and for the Victorian government to urgently remove the bans and moratoriums in that state,” said Appea director of economics Damian Dwyer.
“As AEMO finds, these remain important barriers to increasing energy security and placing downward pressure on prices.
“Action to develop our gas reserves and resources to ensure more gas supply and more gas suppliers is the most enduring and sustainable way forward. Making this happen should be the focus of all governments.”