New gas supply for east coast domestic market

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Image credit: Australian Government

The Australian Government has secured two new commitments from APLNG and Senex, totalling up to 300 PJ of gas to 2030 and 140 PJ to the end of 2027, to increase gas supply to the east coast domestic market.

The energy market operator and ACCC have warned that gas supply may be limited in 2027, highlighting the importance of supply agreements to mitigate this potential issue.

According to the Federal Government, the supply is vital for households, industry, and gas power generation as the Bass Strait fields diminish.

The Government noted that the Greens’ attempt to disallow the Australian Gas Code in Parliament, opposing new gas supply, is putting its full implementation at risk despite its commitment to the domestic market to meet forecast shortfalls.

Adertisement

Furthermore, the Commonwealth warned that if the agreements from APLNG and Senex are not approved, this supply into the east coast market will be jeopardised, creating an unacceptable shortage risk.

“The Code of Conduct is a vital protection for Australian households and business and should have bipartisan support. We implore Senators to vote in favour of the gas code to help protect millions of Australian families and business and ensure they get a fair deal from the gas industry,” the Energy Users Association of Australia said.

APLNG and Senex have been granted Ministerial Exemptions from the Gas Market Code of Conduct, providing regulatory certainty for their investment and development plans, and enabling additional supply to control prices.

Minister for Climate Change and Energy Chris Bowen described the outcome as a success for Australian energy users.

“The new commitments will provide more affordable gas to the Australian market in the short to medium term and will provide the energy security that Australia needs as it makes its transition to net zero emissions,” Minister Bowen said.

Minister for Resources and Northern Australia Madeleine King said the supply commitments exemplify how industry and government can collaborate to solve problems.

“The role of gas is changing in the Australian economy, and as it changes, gas will continue to play an important role in the reliability and stability of the energy system,” Minister King stated.

According to her, the flexibility of gas as a firming fuel and an essential manufacturing and minerals processing input will be required as the transition advances domestically and in the region.

“These commitments also mean that gas producers can get on with the job of safely and responsibly delivering gas to users, while reassuring project investors and our export partners that Australia remains a stable and reliable supplier of energy,” Minister King added.

The commitments are the first of several applications anticipated to be made under the new Code. 

The ACCC will publish information on the precise legally enforceable commitments. Companies will report compliance to the ACCC regularly for inclusion in the ACCC’s quarterly gas outlook report, and failure to comply with exemption conditions will result in the most severe penalties permitted under the Code.

The Mandatory Gas Market Code of Conduct was enacted in July of this year and will be reviewed by 2025.