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Woodside, which owns a 50 per cent stake in Bass Strait’s Gippsland Basin joint venture with ExxonMobil, this month signed off on a project to expand capacity at one of their fields, but overall production remains in rapid decline.
Unless greater gas supplies are urgently made available to offset those declines, warns AEMO, homes and businesses in Victoria, NSW and South Australia are heading for a domestic gas deficit by 2028 or even sooner, raising the risk of physical fuel shortages and runaway bills.
More Australians are moving to replace gas appliances with electric alternatives, which is driving down forecast demand levels. But that shift is not happening fast enough to avert annual supply deficits, expected within as little as three years, according to AEMO.
Companies across the Australian energy sector are proposing ways to address the looming shortfall, including planning the south-eastern states’ first shipping terminals capable of importing LNG from parts of the country that export cargoes of the fuel, including Queensland and Western Australia.
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The most advanced plan to import LNG is the Port Kembla energy terminal, developed by Andrew and Nicola Forrest’s Squadron Energy. Another is Viva Energy’s planned terminal at its Geelong oil refinery, which is undergoing assessment for environmental approval.
Gas infrastructure company APA Group has revealed a proposal to expand the capacity of the pipeline from Queensland into the southern states by 24 per cent. APA chief Adam Watson said this would negate the need for the “disastrous option” of gas-rich Australia turning to imports, which would tie local consumers to price swings of volatile global gas markets.
“Importing higher-cost, higher-emissions LNG … will undermine domestic energy security and expose Australia’s energy market to global supply chains and prices,” he said.
Viva Energy chief Scott Wyatt said Victoria’s gas market was “getting shorter by the day”, and the crunch would require more than one way to boost supply.
“Victoria needs gas, and every project can have its place,” Wyatt said.
“The beauty of an LNG facility like ours is that it can be done very quickly, relative to building a new pipeline, and at a much lower cost.”
The comments came as shares in ASX-listed Viva Energy, which also owns Australia’s Shell and Liberty petrol stations, crashed by 26 per cent on Tuesday after it delivered a 20 per cent fall in benchmark profit and warnings of ongoing challenges in retail and refining.
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