East Australia secures extra domestic gas to 2030

Australia's federal government has secured up to 300PJ (8bn m³) of extra gas supplies for the country's east coast market to 2030, helping offset a predicted domestic shortfall.

The two enforceable commitments for supply agreed with Australian gas producer Senex Energy and the 9mn t/yr Australia Pacific LNG (APLNG) project totals around two years of east coast industrial use, the federal government said on 27 November.

About 140PJ will arrive before 2027, with both companies granted ministerial exemptions from the price cap under Australia's gas code of conduct, giving "regulatory certainty over their investment and development plans and the additional supply helping to keep a lid on prices" according to the government.

The 300PJ adds to the indicative domestic supply commitments of 260PJ to 2027 made prior to the code's release in July, with the government anticipating further applications to be made under the code as it works with the industry on energy security. The period during which the code was being developed was blamed for investment uncertainty that further risked new supply commitments. But many large-scale energy users welcomed the final code, saying it will prevent future price shocks.

Only seven domestic gas agreements were executed between September 2022 and February 2023 for supply next year, a 46pc fall from January-August 2022 and 22pc lower than September 2021 to February 2022, the Australian Competition and Consumer Commission (ACCC) said in June.

The federal government signed a heads of agreement last year with all three LNG exporters at Queensland's Gladstone for an additional 157PJ of supply in 2023 to shore up east coast supplies, just after extending the Australian Domestic Gas Security Mechanism to 2030 that gives the ability to order LNG projects to divert more gas to the domestic market. The supply arrangements will be overseen by the ACCC, which has emphasised that uncontracted gas supplied to the domestic market is essential to avoid a supply shortfall.

APLNG's 2023-24 output is now expected to be towards the top end of the guidance range of 680-710 PJ, driven by better than expected execution of workover activity and production optimisation programmes, Australian independent Origin said. Origin is the upstream operator of APLNG with a 27.5pc stake, with downstream operator ConocoPhillips holding 47.5pc and China's state-controlled Sinopec 25pc.

Senex, jointly owned by Australian gas energy firm Hancock and South Korea's Posco, aims to develop its A$1bn ($657mn) Atlas project in Queensland's Surat basin](https://direct.argusmedia.com/newsandanalysis/article/2486435) and reach 120 PJ/yr output by 2027, exporting to South Korea post-2025. Senex this month increased its assets in the Surat basin in a A$12.5mn deal to acquire a 50pc stake in the Range gas project.

By Tom Major