AsianOil: Australia releases 20-year gas sector strategy
The Australian government released its first full National Gas Infrastructure Plan (NGIP), alongside the Future Gas Infrastructure Investment Framework, late last week.
The government said on November 26 that the plan and the framework were part of Prime Minister Scott Morison’s “gas-led recovery” strategy and that they would secure national gas supplies over the next 20 years.
To this end, the NGIP sets out a long-term development pathway that locks in supply for households and manufacturers, and five priority actions for East Coast gas supply and infrastructure out to 2040.
Meanwhile, the Future Gas Infrastructure Investment Framework, which will be used to implement the supply and infrastructure priorities, lays out the principles for potential government support.
Production and transmission
The government said at least one new basin would need to be brought online before 2030 to meet projected East Coast gas demand. It went on to identify Santos’ Narrabri coal-bed methane (CBM) project in New South Wales, the Northern Territory’s Beetaloo sub-basin as well as Queensland’s Galilee and North Bowen basins as “critical” sources of new supply.
In addition to upstream investment, the NGIP wants to expand both the capacity of networks that supply the East Coast market as well as the capacity of the north-to-south pipeline network.
Australian Energy Minister Angus Taylor said: “The Morrison government is serious about gas and acknowledges the important role it plays supporting jobs, food-production, manufacturing, industry, exports and energy supply.”
The minister added that the NGIP would support a strategic approach to gas infrastructure investment over the next 20 years, while guiding industry to priority areas that “need to be addressed to avoid a supply shortfall”.
He said: “This will ensure our domestic gas prices remain internationally competitive. The UK and Europe have experienced price increases [of] over 400% in recent months due to gas shortages. The government cannot sit back and allow that to happen here. Australian prices have remained 60-70% lower than prices in Asia and Europe even in light of this major energy shock.”
Speeding up the recovery
The Australian government’s “gas-fired recovery” aims to drive up domestic gas production such that local prices fall and the manufacturing sector benefits in the long run.
Taylor said the government’s focus on gas and energy security had helped to grow the Australian manufacturing sector to “more than 1mn jobs – levels not seen since 2009”.
The government is also calling on industry to contribute to a new expression of interest (EoI) process that is seeking submissions on critical mid-stream gas infrastructure projects that meet both the NGIP’s priorities identified and the framework’s principles.
These include projects that enhance competition in the market and allow for the consideration of gas infrastructure that also supports hydrogen, carbon capture and storage (CCS) and biomethane.
Taylor said: “The government wants industry to make these investments, and the investment framework and EOIs will allow us to take action to accelerate the development of critical projects to final investment decision [FID].”
As part of the government’s commitment to an ongoing series of NGIPs, Canberra intends to deliver the next report in late 2022.