A gas shortage could hit Australia’s east coast and southern States this year despite Government efforts to protect supplies, according to the Australian Competition and Consumer Commission’s (ACCC) latest gas inquiry report.
Chair of the ACCC, Gina Cass-Gottlieb said the Gas inquiry 2017–2030 Interim report forecasted a supply shortfall in the east coast gas market of 30 petajoules (PJ) – equivalent to about five per cent of annual consumption.
Ms Cass-Gottlieb said Australia’s three east-coast LNG producers had enough uncontracted gas to prevent a domestic shortfall, but had not yet committed sufficient supply to address the risk of a shortfall.
“In July last year, the ACCC forecast a 56 PJ supply shortfall in 2023,” Ms Cass-Gottlieb said.
“The east coast gas supply forecast for 2023 has improved,” she said.
“But the outlook remains uncertain as the LNG producers haven’t yet committed sufficient volume under firm contracts to address the risk of a domestic shortfall.”
Ms Cass-Gottlieb said the LNG producers were expected to produce 146 PJ more gas than they needed to meet their contractual commitments, of which 30 PJ is needed domestically to avoid a shortfall.
She said the Report showed the three producers had been net withdrawers of gas from the domestic market since 2021 – buying more gas from other gas producers than they supplied to domestic customers – “which has worsened the gas shortfall”.
Meanwhile, demand for gas in the southern States is expected to exceed production by 52 PJ from local gas sources (equivalent to about 12 per cent of forecast demand).
“While the latest information suggests forecast gas production from the Gippsland Basin will increase in 2023, this is offset by a reduction in forecast production from the Otway Basin due to unexpectedly poor performance of gas wells,” Ms Cass-Gottlieb said.
The ACCC’s 167-page Report can be accessed at this PS News link.
