East Coast Gas Outlook 2024November26, 2024EastCoast Gas Outlook...

East Coast Gas Outlook 2024

November26, 2024

EastCoast Gas Outlook 2024

East Coast Gas Outlook 2024 – uncharted energyfrontiers

The sixth and latest annual East Coast Gas Outlook,finds that the outlook for east coast gas is now entering ‘uncharted energyfrontiers’.

The new report of more than 310 pages, isEnergyQuest’s annual in-depth analysis of the long-term outlook for the eastcoast gas market, compiled by a multi-disciplinary team of experienced energyprofessionals: geologists, petroleum engineers, marketers, and policy andpolitical experts.

Gas supply shortfalls are expected for the eastcoast market as soon as 2026, with increasing certainty and impact from 2028.That much is well known.

EnergyQuest’s new report finds that future gassupply issues are even more acute when the seasonal winter peaks of Victoriaand NSW are considered. These two states will be reliant on LNG imports withina few short years, or there simply won’t be enough gas supply to meet demand,and gas users will be unable to source gas at any price.

EnergyQuest’s analysis shows there is only enoughsupply to meet 70% of NSW/ACT demand in the winters of 2026, 2027, and 2028,without LNG imports (or some other, as yet unidentified gas supply).

Victoria has for decades been supplied by largeoffshore gas fields but these are running out. From Winter 2028, demandforecasts require 32% of Victoria’s gas supply from LNG imports, increasing to42% in 2029, and to more than half at 55% in 2030.

By 2034 LNG imports are needed to supply more thanhalf of demand in the Southern Region (NSW/ACT, Victoria, South Australia, andTasmania).

Raiding the ‘LNG foundation contract’ piggybank anddiverting gas from Queensland or NT LNG feedstock to the domestic market, mayseem politically expedient, but it won’t work in the short term. The pipelinesfrom the north are already running at capacity in the peak winter months, andthere is insufficient storage in the southern states to store off-peak gas.

The key Victorian gas plant at Longford supplied61% of the total south-east gas production in 2023/24. It is managing late lifegas field decline, and Longford capacity has already reduced by 33% from 1,040TJ/day in 2022, to 700 TJ/d in late 2024. Replacing this loss of capacity wouldrequire nearly doubling gas storage, and/or pipeline capacity from the north,or LNG imports.

An LNG import terminal can add up to 500 TJ/d ofswing capacity and up to 100 PJ/a (20% of the east coast/NT demand) by winter2026. Other options such as storage or more pipelines can help, but not withthe same volume, certainty and timeframe.

Current government policy settings and projectinvestment trends are not addressing the imminent seasonal shortfalls.

What is distinctive about recent developments inthe gas industry is not just the volatility, but the lack of a single orcompelling pathway to success – we are truly in uncharted waters – and thedestination is lost in the fog of polarised arguments.

Below are links to the Media Release and thereports brochure and order form.

Contact EnergyQuest if you would like to speak tothe authors and discuss any aspects of the report

Rogerd