News: ORG Australian regulator warns east coast to face gas shortage by 2027

SYDNEY, July 5 (Reuters) - Australia's east coast could face gas shortages from 2027, a year earlier than initially forecast, the country's competition regulator said on Friday, as it called for an urgent need to develop new sources of production and supply.

The Australian Competition and Consumer Commission (ACCC) said in an interim update that the warning reflects potential lower supply due to delays in approvals for new projects.

The ACCC warning came in two weeks after Australia's energy market operator said the east was facing an immediate gas shortage following a cold snap that drove up demand for heating. Meanwhile, supply dipped due to an extended outage at the region's main gas plant.

Australia produces more gas than it needs to meet its domestic demands, but most supply is contracted for export.

The decision to extend the closure of Origin Energy's Eraring coal-fired power plant, the country's largest, by two years until 2027 improved the energy outlook but it did not change "the fundamental trajectory of supply," the ACCC report said.

The southern states may have to rely on gas from Queensland state, where Shell SHEL.L , Origin Energy (ORG) and Santos (STO) operate gas fields, unless new sources of supply are made available and demand remains the same. But from 2029, Queensland will also require new sources of supply, the regulator said.

Australia considers gas a critical element in its transition to cleaner energy as the country moves rapidly away from its dependence on coal-fired power stations. The Labor government in May backed long-term gas drilling despite its plans to reach net-zero carbon emissions by 2050.

Governments should not ignore ACCC's warning and must fast-track new gas projects to prevent any shortfall, Australian Energy Producers Chief Executive Samantha McCulloch said.

"Without immediate government action to address the looming gas supply crisis, millions of Australians face higher energy prices and the real risk of blackouts," McCulloch said.