Gas shortage eases on East coast – ACCC

The Australian Competition and Consumer Commission has signaled that pressures on gas prices are easing for industrial customers with news of a potential surplus of gas.

Australia’s east coast gas market is expected to have a six petajoule (PJ) surplus in the third quarter of 2024, even if the three LNG producers export all their uncontracted gas, according to the ACCC’s March 2024 interim gas inquiry report.

This forecast is a 10 PJ improvement since the ACCC’s December 2023 gas inquiry report and is the first time the ACCC has forecast a supply surplus for the third quarter of 2024.

ACCC Chair Gina Cass-Gottlieb said: “A small surplus for the peak demand winter months is positive, but we would caution that the outlook is subject to some uncertainty in both supply and demand.

“The storms in Victoria in February, which led to coal power station outages and increased demand for gas-powered generation, are an important reminder that demand forecasts can quickly change.”

The three east coast gas exporters Shell’s QCLNG joint venture, Origin Energy-backed APLNG and Santos’ GLNG will not now be faced with directions from the federal government to break contracts to supply the east coasty, according to media reports.

Resources Minister Madeleine King on Thursday said the government would not need to trigger export restrictions under the so-called Australian Domestic Gas Security Mechanism (ADGSM) for the three months to September 30.

On a regional basis, the southern states of Victoria, New South Wales, South Australia, and Tasmania are expected to need at least an additional 25 PJ of gas to meet demand in the third quarter this year.

However, Queensland is forecast to have a 30 PJ surplus, even if the LNG producers export all their uncontracted gas.

Demand in the southern states is expected to be met through gas already held in storage there and pipeline capacity allowing transport of Queensland’s excess gas south.

The Iona underground gas storage facility in Victoria held 22.5 PJ of gas on 15 January 2024, which is the highest January volume recorded at that facility.

“We expect the volume held at the Iona storage facility will reduce some reliance on pipelines in the third quarter of this year,” Cass-Gottlieb said.

“Gas from storage is more likely to be needed on peak days, such as when cold weather increases southern demand alongside commercial and industrial consumption.”


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