Australia's domestic gas supplies face a surplus for 2024, although an increasing reliance on Queensland output means the risk of a shortfall will continue.
Additional commitments by east coast LNG producers, driven by higher net gas swaps, should see increased uncontracted gas making its way to Australian homes and businesses. The Australian Competition and Consumer Commission forecasts a gas surplus of 27PJ (721mn m³) for the east coast market next year.
But uncertainty around the federal government's late 2022 price intervention in gas markets has led to fewer gas supply agreements for 2024 than in previous years. With waning exploration the federal government has promised a future gas strategy will be finalised in 2024 to plan for Australia's gas needs.
Winter gas supplies remain at risk of interruption along the South West Queensland (SWQ) pipeline, which carries coal-bed methane south during the cooler months, despite projects to expand the capacity of the SWQ and Moomba-Sydney pipelines by an additional 13pc.
Warmer El Nino weather conditions should alleviate some of the gas demand of recent seasons, while also increasing the reliability of onshore production.
But after a 2023 marked by low gas-fired power generation demand because of increased availability of coal-fired plants, ageing coal-fired units could fail in the hotter weather.
To guard against gas shortages LNG import terminals are planned for the nation's southeast, although developers have advised they are unlikely to come on line until 2025-26.
Extra supplies may come from the Otway basin in Victoria state where domestic producer Cooper Energy could reach a long-awaited final investment decision (FID) on its promised OP3D project. This would make better use of gas processing infrastructure at the Athena processing plant, which has around 150 TJ/d (4mn m³) of total capacity and current throughput of 25 TJ/d. The firm delayed its FID because of uncertainty regarding the federal government's gas code of conduct, which has been finalised awaiting legislative passage through the Senate, Australia's upper house of parliament.
Cooper is revamping its Orbost processing plant that processes Gippsland basin gas, predicting output to rise 4pc from a year earlier for the 12 months to 30 June 2024.
Australia's largest east coast gas producer — the 9mn t/yr Australia Pacific LNG project in Queensland — is predicting output will rise in the 2023-24 fiscal year ending 30 June, after a 3pc fall in 2022-23 because of the impact of wet weather. Gas output is estimated at 680-710PJ for 2023-24, with APLNG upstream operator Origin Energy expecting production to be at the top of that range, potentially 5pc up on the previous year's 674PJ when 150PJ was sold as domestic gas.
Stalled projects
Senex Energy's stalled A$1bn ($675mn) Atlas expansion in Queensland could start in 2024 if it is granted relodged federal environmental approvals. Senex has agreed conditional gas sales totalling 150PJ to date and is targeting its first gas in early 2025.
But Australian independent Santos' Narrabri gas project in New South Wales remains uncertain. Santos pushed back the FID on the 80 TJ/d Narrabri phase one to 2025, as it awaits the results of an appeal against a native title ruling from December 2022. Santos said it is continuing to progress land access agreements and easements for the proposed Hunter Gas Pipeline to link Narrabri to markets.
Delays to new fields like Narrabri in southeast Australia increases the likelihood of LNG imports becoming a significant part of the region's gas supplies later this decade.
A more upstream-friendly coalition government in New Zealand has hinted at overturning a 2018 ban on offshore oil and gas exploration in 2024. This may turn around New Zealand's falling gas production, projected to halve by the end of the decade from 188.82 PJ/yr in 2022 to 90.57 PJ/yr in 2030.
