Market operator: Australia gas supply crunch will be delayed until 2030

The feared gas shortage in Australia's east has been delayed by one year, to 2030. This is due to the coal power extension, falling consumption, and rapid battery uptake.

"Practical actions make a difference." "More renewables, batteries and sensible gas policies improve energy security and put Australia in a better position," said Minister for Climate Change and Energy Chris Bowen in a press release.

The federal government, citing a shortage of gas, told Queensland LNG exporters in December to reserve 25%?of their gas to be used domestically starting 2027.

Three?LNG-export consortia are based in the state, led by Santos Shell and ConocoPhillips. The government will be finalising a policy on gas later this year that addresses the concerns of large-scale gas consumers and the competition watchdog.

The Australian Energy Market Operator (AEMO), in a report released on Thursday, said that "existing, committed and expected production from Queensland will?increase due to improved 'forecast supply from liquefied Natural Gas (LNG) producers."

The report noted that APA Group is building a new gas pipeline to transport gas from Queensland down south, as new projects are coming online. APA and the industry group Australian Energy Producers welcomed this report, but Australian Energy Producers said that governments should 'continue to encourage the new supply of gas and not impose any new taxes.

AEMO's executive?general director of?system design Nicola Falcon stated that, "while the gas supply outlook is slightly improving, it is still important to complete on time all committed and?anticipated projects for gas production, storage, and pipelines."

According to a previous report, gas use for power has fallen to its lowest level in two decades. However, it is still used by some states for large industry and heating.

Gas prices on the east coast of Australia have not been affected by the soaring gas 'prices in Europe and Asia, since the start of the U.S. Israel war with Iran. The market operator did not model its outlook on events in the Middle East.

AEMO warned that if some of the appraisal and exploration work underway does not result in a supply, its current outlook for supplies could be revised downward.

(source: Reuters)