PERTH (miningweekly.com) – Latest data from the Australian Energy Market Operator (AEMO) has confirmed that actions taken by the industry to bring more gas into the domestic market will ensure domestic gas supply to at least 2023.
In its 2020 Gas Statement of Opportunities (GSOO), AMEO noted that the outbreak of the Covid-19 coronavirus in early 2020 is likely to lead to decreased levels of global liquefied natural gas (LNG) demand in 2020, and decline in economic activity in Australia for at least the short term. The potential impact of this has not been included in these forecasts and could mean a lower short-term demand forecast.
Australian Petroleum Production and Exploration Association (Appea) CEO Andrew McConville said on Friday that while the GSOO’s analysis has in many cases been overtaken by the onset of the Covid-19 pandemic, the GSOO found the industry has increased substantially the flow of gas to the east coast domestic market and this will continue into the future.
“There have been a significant number of new gas supply agreements announced since 2017 providing gas to domestic customers,” McConville said.
“The industry’s operations are more essential than ever in the face of the Covid-19 pandemic and the Australian natural gas industry is responding to the personnel and operational challenges posed by the Covid-19 to ensure those vital energy supplies are maintained.
“Appea members are taking all steps necessary to ensure the production and delivery of gas supplies continues. This week the domestic market spot prices have fallen to multi-year lows.”
McConville said while the forecasting results in the GSOO have in many cases been overtaken by the situation we now face, the core messages remain relevant.
“This year’s GSOO, as with many of the previous GSOOs, noted further action by both industry and governments will be required to bring more gas into the east coast domestic gas market beyond 2024.
“The GSOO forecasts supply reducing in the major consumer states of Victoria and New South Wales over the next few years as legacy fields decline. While Queensland and Northern Territory are increasing supply, more needs to be done closer to the demand centres of Melbourne and Sydney.
“The GSOO finds that meeting demand over that period will require substantial and ongoing industry investment to commercialise existing reserves and resources and find new sources of supply.
“With exploration at record low levels, low oil prices and the Covid-19 pandemic meaning both gas demand and gas supply face challenges, the GSOO’s analysis reinforces how vital it is for all governments to support developing new gas supplies as quickly and as cheaply as possible,” McConville said.