PERTH (miningweekly.com) – Western Australia’s gas demand between 2023 and 2032 is expected to marginally exceed potential supply between 2023 and 2026, new data from the Australian Energy Market Operator’s (AEMO) found.

AEMO’s executive GM – Western Australia and strategy, Kate Ryan said that for the period from 2023 to 2026, the Western Australian gas supply-demand balance is tight, with a small deficit of 45 PJ over the four years.

“The forecast shortfalls are being driven by changes in production and increased demand, including for gas-powered generation and new resource projects.

“Between 2027 and 2029, supply is expected to exceed demand by 38 PJ, helped when Woodside’s Scarborough project is brought onstream. The domestic gas market then moves into a larger deficit from 2030 onwards in line with scheduled coal generation retirements and a decline in production from existing gas fields,” she said.

Possible market variability could see the domestic gas market shift further into either a surplus or deficit between 2023 and 2029, particularly if demand or supply projects are potentially delayed and as industry decarbonisation plans take shape.

“Several solutions are available to alleviate possible shortfalls, including drawing from Western Australia’s existing gas storage, which can deliver up to 210 TJ per day, and developing gas fields not currently included in the forecasts, such as Corvus, Lockyer Deep and South Erregulla,” said Ryan.

Demand for gas generation in the South West Integrated System (SWIS) is expected to grow from 127 TJ per day in 2023 to 304 TJ per day in 2032 as Synergy’s scheduled coal generation retirements proceed, driving up demand for alternative generation to fill the gap. This, combined with committed resources projects, will see an annual average lift of 1.7% in demand.

“The strong linkages between Western Australia’s gas and electricity sectors mean that changes occurring in one sector will have an impact on the other,” said Ryan.

“This reiterates the importance of timely investment in new gas developments, firming technology and storage solutions to maintain a secure and reliable energy system,” she said.

The AEMO took note of the large volume of offshore and onshore undeveloped gas that could supply the Western Australian domestic market during the outlook period, but pointed out that these resources were currently too speculative to include in the potential supply forecasts.

The Australian Petroleum Production & Exploration Association (Appea) said that the AEMO’s Gas Statement of Opportunities (GSOO) for Western Australia underlined the importance of bringing new gas supplies to market to power Western Australia’s growing resources industry and to support the SWIS as coal-fired power is phased oud.

“The GSOO reinforces the critical role of natural gas in Western Australia’s economy, particularly in providing reliable energy to the resources sector, and in supporting Western Australia’s broader energy transition as renewable energy generation increases,” said Appea director Clair Wilkinson.

“The ability of natural gas to facilitate emissions reduction, such as assisting Western Australia to phase out coal generation and supporting the uptake of renewable energy, means new and ongoing supply is needed.”

Western Australia is the largest consumer of natural gas in Australia, consuming almost as much gas as Queensland, New South Wales and Victoria combined, largely driven by the mining and minerals sector.

“For Western Australia  to continue the good fortune it has of ample resources and affordable energy prices, we must continue to explore for and develop new gas supplies,” Wilkinson said.

“But good fortune alone won’t get us there. We need efficient project assessment and approvals which we simply don’t have with prospective developments literally taking years to get all their approvals in place.

“What industry needs is an expedited approvals system, similar to the recent announcement for green energy, so that sufficient natural gas supplies are available to support the future growth of renewable energy and ensure Western Australia’s energy requirements are met.”