East Coast Gas Outlook 2024 – uncharted energy frontiers
The sixth and latest annual East Coast Gas Outlook, finds that the outlook for east coast gas is now entering ‘uncharted energy frontiers’.
The new report of more than 310 pages, is EnergyQuest’s annual in-depth analysis of the long-term outlook for the east coast gas market, compiled by a multi-disciplinary team of experienced energy professionals: geologists, petroleum engineers, marketers, and policy and political experts.
Gas supply shortfalls are expected for the east coast market as soon as 2026, with increasing certainty and impact from 2028. That much is well known.
EnergyQuest’s new report finds that future gas supply issues are even more acute when the seasonal winter peaks of Victoria and NSW are considered. These two states will be reliant on LNG imports within a few short years, or there simply won’t be enough gas supply to meet demand, and gas users will be unable to source gas at any price.
EnergyQuest’s analysis shows there is only enough supply to meet 70% of NSW/ACT demand in the winters of 2026, 2027, and 2028, without LNG imports (or some other, as yet unidentified gas supply).
Victoria has for decades been supplied by large offshore gas fields but these are running out. From Winter 2028, demand forecasts require 32% of Victoria’s gas supply from LNG imports, increasing to 42% in 2029, and to more than half at 55% in 2030.
By 2034 LNG imports are needed to supply more than half of demand in the Southern Region (NSW/ACT, Victoria, South Australia, and Tasmania).
Raiding the ‘LNG foundation contract’ piggybank and diverting gas from Queensland or NT LNG feedstock to the domestic market, may seem politically expedient, but it won’t work in the short term. The pipelines from the north are already running at capacity in the peak winter months, and there is insufficient storage in the southern states to store off-peak gas.
The key Victorian gas plant at Longford supplied 61% of the total south-east gas production in 2023/24. It is managing late life gas field decline, and Longford capacity has already reduced by 33% from 1,040 TJ/day in 2022, to 700 TJ/d in late 2024. Replacing this loss of capacity would require nearly doubling gas storage, and/or pipeline capacity from the north, or LNG imports.
An LNG import terminal can add up to 500 TJ/d of swing capacity and up to 100 PJ/a (20% of the east coast/NT demand) by winter 2026. Other options such as storage or more pipelines can help, but not with the same volume, certainty and timeframe.
Current government policy settings and project investment trends are not addressing the imminent seasonal shortfalls.
What is distinctive about recent developments in the gas industry is not just the volatility, but the lack of a single or compelling pathway to success – we are truly in uncharted waters – and the destination is lost in the fog of polarised arguments.
Below are links to the Media Release and the reports brochure and order form.
Contact EnergyQuest if you would like to speak to the authors and discuss any aspects of the report.