East coast gas worries may resurface as producers show their hands
Worries about gas shortages on the east coast could resurface this week as producers publish forecasts for the volume of uncommitted gas they have available over the next two years, with expectations they will expose a potential scarcity of supply.
Shell, Santos and other large east coast suppliers must – under the Albanese government’s new code of conduct for gas producers in the eastern states – provide information on available gas in a requirement intended to increase transparency in the troubled market.
Bass Strait gas production has fallen steeply this year, according to EnergyQuest figures.
While the raw data is expected to take time for the market to digest, gas industry sources suggest that the figures may cause renewed uneasiness as it becomes clearer how vulnerable the market is to a shortfall, especially as a looming decline in production from the Bass Strait takes hold and LNG import projects are delayed.
The Australian Energy Market Operator warned in March of a potential shortfall in the southern states as early as this past winter amid a slowdown in investment in new fields and declining supplies from fields off Victoria. While that did not eventuate, the outlook remains tight, especially as several planned projects remain stalled due to the government’s introduction of a $12 a gigajoule price cap and ongoing price controls.
Gas use within the east coast contracted in the June quarter by 15 per cent year-on-year, following a 10 per cent quarter-on-quarter drop in the January-March period, according to EnergyQuest. It put the shrinkage in demand largely down to a decrease in gas use for power generation to the lowest level for a June quarter since 2006, at just 6.1 per cent.
Production from the east
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