APA Group CEO Adam Watson addressed the Australian Domestic Gas Outlook conference this week in Sydney.
Watson celebrated the positive steps the industry has taken in the past year, including Australia’s Future Gas Strategy.
“A year ago, Australia had no government strategy supporting the critical role gas plays in our energy system,” he said.
“Today, we have a national Future Gas Strategy, which makes it clear that “natural gas is needed through to 2050 and beyond” – to support industry, keep the lights on, and facilitate investment in renewable energy.
“One of its six guiding principles makes it clear that new sources of domestic gas supply are critical to support the energy transition.”
Watson also praised AEMO’s 2025 Gas Statement of Opportunities, which stressed the importance of unlocking new domestic gas supply and further investing in pipeline and storage infrastructure.
Watson then turned his attention to projected gas shortfalls.
“In 2025, the East Coast domestic market is forecast to consume around 500PJs of natural gas. Domestic supply is around that same number, as you’d expect,” he said.
“If we move forward to say 2028, the market is predicting that gas from southern gas fields including the Bass Strait will decrease by around 37PJs, thus creating a potential shortfall. By 2033, southern gas field production is forecast to have dropped by around 270PJs.
“These shortfalls can be filled by basins such as the Surat, which has more than 10,000PJs of uncontracted 2P and 2C resource available alone. There’s no shortage of domestic gas to meet the shortfall, we just have to get it out of the ground to support our demand centres.
“In short, with the right policy settings in place, we should not expect to see a domestic natural gas supply constraint over the near term.”
Watson said that creating the right regulatory and investment environment was key to avoiding shortfalls, rather than importing LNG to Australia.
“Becoming reliant on LNG imports will set the price of domestic gas and no doubt have a detrimental impact on consumer prices, and on industry,” he said.
“Over the most recent Australian summer and winter months, the Asian LNG spot price was between 50 and 80 per cent higher than the Federal Government’s $12 per gigajoule cap on wholesale gas prices.
“Let me be clear, these are not APA’s numbers … this is market data and the prices actually paid in the Asian market. And these prices exclude the cost of processing it and paying terminal fees.”
Watson then turned his attention to LNG exports.
“While we must protect the long-term existing export contracts, new gas development must ensure domestic gas users have access to reliable and affordable gas. This then underwrites a strong LNG export market,” he said.
“At the same time, gas producers and energy users must be open to longer-term agreements that can help support investment in vital new infrastructure.
“If we get this right, it will pave the way for a smoother, fairer and successful energy transition.”
These excerpts have been taken from a longer speech.
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