Santos, AEMO issue warnings on gas

Ben PotterSenior writer

Mar 21, 2024 – 5.00am

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KEY POINTS

• Why it’s important: Industry and households depend on gas to keep the lights on as coal power closes down
• Context: Supply from Victoria’s Bass Strait gas fields will fall sharply from mid-year
• What’s next: AEMO says new investment is urgently needed to avert shortfalls in supply from 2028

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Santos boss Kevin Gallagher says new gas project approvals need to be fixed in Australia and the US to prevent Asian buyers falling into the hands of Russian and Middle Eastern suppliers.

He made the comments on the same day as the energy market operator warned of a fresh deterioration in the supply outlook for Victoria due to looming east coast gas shortfalls.

Mr Gallagher said activists were using the legal system to frustrate new liquefied natural gas projects such as Santos’ Barossa, PNG, Gladstone and Darwin facilities which could provide 7 million tonnes annually to Asia, and if similar US hurdles were maintained “it would leave a hole that I don’t think in the long term any of us could fill”.

“If it is going to be filled, it is going to be filled by countries like Russia and the Middle East. I’m not sure that is the best long-term security, going back to energy security, solution for a lot of those Asian economies,” Mr Gallagher told the CERAWeek conference in Houston on Tuesday.

Kevin Gallagher, CEO, Santos. Dion Georgopoulos

The call to arms came as the Australian Energy Market Operator confirmed previous warnings of looming east coast gas shortfalls and said the outlook for production in Victoria is set to fall by 48 per cent by 2028 – forcing the state that historically supplied two-thirds of southern Australia’s gas to become an importer.