Total annual gas demand is expected to treble from 745 PJ in 2014 to 2,182 PJ in 2033.
“The Queensland liquefied natural gas (LNG) export industry is increasing from nothing in 2013 to approximately 1,450 PJ (more than ten times New South Wales’ 2013 annual gas demand) from 2014 to 2019, and that will affect the entire eastern and south-eastern gas industry,” said Australian Energy Market Operator (AEMO) Managing Director and Chief Executive Officer Matt Zema.
In contrast, domestic demand is projected to grow at a much slower rate. It will grow at approximately 0.9% per annum from present consumption of around 620 PJ a year to approximately 750 PJ a year by 2033; this incorporates a projected fall in gas-powered generation demand in the short term due to rising gas prices, lower electricity consumption growth, and lower carbon pricing projections.
“Eastern and south-eastern Australia has plentiful gas resources to meet both domestic and export demand until the end of the 20-year outlook period, providing investment occurs to develop and transport these resources to where they are needed,” Mr Zema said.
In the short term, demand for gas to supply new LNG export facilities at Gladstone is expected to create opportunities for industry to provide up to 250 terajoules a day of additional supply in Queensland and between 50-100 TJ a day in New South Wales by 2018-19.
Queensland potential shortfalls could be addressed by increasing production. Higher gas prices may also dampen domestic demand alleviating shortfalls.
There are a number of options to address potential shortfalls in New South Wales including continued supply from Moomba, or a combination of augmenting the Eastern Gas Pipeline, storage at Newcastle, and supply from the Gloucester and Gunnedah basins.
Since this analysis was completed AEMO understands industry participants have already moved to address some of these opportunities. For example the interconnect from Victoria is likely to be upgraded reducing the potential New South Wales shortfall. There are also coal seam gas reserves in New South Wales which may be developed.
Investment will be required over the longer-term in New South Wales, South Australia, or Queensland to address the consumption of known Otway Basin reserves in Victoria by 2027. Consumption of these known basin reserves will change gas flow patterns across the east coast.
If developed, reserves in Gunnedah in New South Wales or the Cooper Basin in South Australia/Queensland or the Surat Basin in Queensland could supply the southern states to the end of the outlook period. However, infrastructure investment would be needed to deliver gas from new production sites to the southern states.