Fresh warning on gas shortage as CEOs hauled to Canberra
The gas crisis gripping the east coast gas market is increasingly being recognised as a multi-decade problem with consultancy Wood Mackenzie predicting prices will only continue to increase due to inadequate resources and pipeline infrastructure well beyond 2030.
The warning comes ahead of
Wednesday morning's meeting in Canberra of chief executives and senior representatives of gas producers on the east coast who will be grilled by federal resources minister Matt Canavan on the outlook for supply ahead of his critical decision whether to trigger LNG export controls.
Wood Mackenzie's director of gas and LNG research, Nicholas Browne, said the east coast gas market would be "precariously tight" through to 2028 but after that there is just not enough gas to meet both LNG export contracts and demand.
"More gas will need to be developed and commercialised, or LNG imported, to meet the needs of both the domestic market and to fulfil LNG contracts," Mr Browne said.
"However, no new easy and economical sources of supply are currently available to the market."
The gas crisis gripping the east coast gas market is increasingly being recognised as a multi-decade problem with consultancy Wood Mackenzie predicting prices will only continue to increase due to inadequate resources and pipeline infrastructure well beyond 2030.
The warning comes ahead of
Wednesday morning's meeting in Canberra of chief executives and senior representatives of gas producers on the east coast who will be grilled by federal resources minister Matt Canavan on the outlook for supply ahead of his critical decision whether to trigger LNG export controls.
Wood Mackenzie's director of gas and LNG research, Nicholas Browne, said the east coast gas market would be "precariously tight" through to 2028 but after that there is just not enough gas to meet both LNG export contracts and demand.
"More gas will need to be developed and commercialised, or LNG imported, to meet the needs of both the domestic market and to fulfil LNG contracts," Mr Browne said.
The firm said the more than 13,000 petajoules of undeveloped gas in eastern Australia and the Northern Territory is either uneconomic to produce, unproven or "stranded" from existing pipelines.
It predicts pipeline bottlenecks during winter will constrain the delivery of Queensland gas into southern states starting in 2026 and LNG imports will be the only way of getting enough supply, at least in winter.
Prices to climb further
The problems are bad news for gas buyers,
pointing to prices remaining elevated and heaving north rather than south.
Contract prices in the east are already put at $8.50-$11 a gigajoule, more than double historical rates of $3.50-$4/GJ.
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