Australia signs gas supply deals for east coast markets

The Australian Government has announced new gas supply deals in the east coast market. Under the government’s gas code rules, more than 260 PJ of gas will be made available up to 2033 through the agreements signed with Esso and Woodside.

The gas, enough to power gas-fired power stations for approximately two and a half years, will be directed to southern demand centres, which are at risk of seasonal shortfalls. As per the announcement, the goal is to maintain a sufficient domestic supply to exert downward pressure on gas prices.

These latest commitments build on previous deals from November 2023 with Australia Pacific LNG (APLNG) and Senex Energy, backed by Posco International of South Korea.

APLNG and Senex Energy agreed to provide up to 300 PJ of gas by 2030. APLNG is a partnership between ConocoPhillips, Origin Energy and Sinopec.

Despite Australia’s capability to produce more gas than required for domestic consumption, the majority is earmarked for export. Meanwhile, the Labor Government has set a target for 82% of the country’s power to come from renewable sources by 2030.

“We know that gas is critical to supporting a lower-cost, more renewable grid as ageing coal exits, and to support Australian manufacturing — which is why we have delivered this code to shore up energy reliability and affordability,” said Minister for Climate Change and Energy Chris Bowen.

“Gas is essential to supporting the nation’s energy grid, and the reliable supply of gas is crucial to keeping energy prices down for households and businesses,” said Minister for Resources Madeleine King. “Gas is our insurance policy for the energy grid as we move to cleaner and greener renewables. Gas is also indispensable in the processing of critical minerals and technologies such as wind turbines and solar panels.”

Image credit: iStock.com/Iurii Garmash