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E-mail Xinhua, July 5, 2024
SYDNEY, July 5 (Xinhua) -- Australia's competition regulator released its latest gas inquiry report on Friday, indicating that the country's east coast market is likely to struggle with a risk of a shortfall in the winter of 2025.
The Australian Competition and Consumer Commission (ACCC) estimated that if Queensland's liquefied natural gas (LNG) producers export all of their uncontracted gas, Australia's east coast is forecast to have a surplus of between 69 and 110 petajoules in 2025.
A shortfall, however, may emerge in the third quarter of 2025 as energy demand typically increases during the winter months for heating purposes.
The ACCC noted that the risk has dropped with the extended operation of the coal-fired Eraring Station, Australia's largest power facility boasting an overall generating capacity of 2,922 MW.
"But, if a shortfall does occur, LNG producers will need to commit a small amount of additional gas to the domestic market to ensure there is sufficient supply," said the authority.
To prevent local shortages in both the second and third quarters of 2025, gas will have to be transported from Queensland to several southern jurisdictions, such as the Australian Capital Territory, New South Wales, South Australia, Tasmania, and Victoria.
According to the ACCC, the outlook for 2025 is sensitive to multiple factors, including variable demand for gas-powered generation induced by weather events and unscheduled maintenance and outages in the electricity network.
The variability of demand and reliance on interstate transfers emphasize the need for sufficient gas pipeline and storage capacity, in addition to gas production.
The report also found that prices in the east coast gas market have continued to decline from their peak in mid-2022 and are now approaching levels last seen in early 2022, which can be detected in both producer and retail prices.
The prices offered by producers for 2024 supply fell by two percent between August and December 2023 to 14.32 Australian dollars (about 9.65 U.S. dollars) per gigajoule, while those offered by retailers for 2024 supply also fell over this period, by 16 percent to 16.51 Australian dollars (about 11.12 U.S. dollars) per gigajoule. Enditem
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