Oz East Coast Faces Potential Gas Shortage

South-eastern Australia could face a gas shortfall within six years, one of the country's major power and gas network operators warned March 28.

The Australian Energy Market Operator (AEMO) said that existing and committed gas supply sources may be sufficient to meet demand in southern and south-eastern Australia only until 2023. The operator projects an overall gas supply shortfall from 2024 unless long term responses are forthcoming.

Those steps could include new commitments to develop existing reserves and contingent resources, increased pipeline capacity from Queensland, or further investment in alternative infrastructure development including gas storage and LNG import terminals, AEMO said.

Additional sources of gas supply are required to address a forecast gap in meeting long-term winter gas demand, AEMO said in its  2019 Gas Statement of Opportunities (GSOO). Victorian producers, which produce most of the gas consumed in southern Australia, continue to forecast declining production as offshore gas fields are depleting.

According to the GSOO, there is a need for further investment in existing reserves or alternative gas supply infrastructure developments, such as additional north to south pipeline capacity or gas import terminals, to reduce the risk of shortfalls.

“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’s chief system design and engineering officer Dr Alex Wonhas.

“However, southern Australia’s overall supply-demand balance for 2021-2023 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,” he added.