EnergyQuest has released a new multi-client report on the Gas Market Intervention – a deep dive into the politics, policy settings, environmental drivers and implications for the gas industry following the recent market interventions of the Australian Government.
The gas market intervention does not address the fundamentals, and more intervention is likely.
“The government took control of the east coast domestic gas market in an effort to artificially lower prices and ensure ongoing supply. It can’t achieve both these goals over the long term and may end up achieving neither. Price spikes and energy shortages during periods of peak demand are still possible. More government intervention, likely to the detriment of gas users, will be the result,” EnergyQuest Chief Executive Officer, Rick Wilkinson said.
“A Future Gas Strategy was announced in the 2023 Budget and is a sensible step, but the options for industry and government are limited. Gas supply in the southern states is running out. There are no material development projects coming in the front end, ongoing low levels of exploration, no remaining ‘slam dunk’ projects, and a reluctance to sanction any large sources for supply from the resources that are left”.
“Without new gas supply or LNG imports, a shortfall of over half an LNG train’s worth of gas (the volume of NSW’s annual gas demand) will need to be diverted from LNG export supply by 2030 to satisfy east coast demand on an annual basis,” Mr Wilkinson said.
“A disorderly withdrawal of coal-fired power generation presents an additional risk. If all downside risks materialise in a worst-case scenario, there would be major pressure on foundation LNG contracts as soon as 2026”.
EnergyQuest’s Gas Market Intervention report builds on its proprietary East Coast Gas Outlook model and takes a deep dive into the history, state of play, outlook and risks for gas supply and market participants.
The report’s authors are EnergyQuest CEO, Rick Wilkinson, with over 35 years of engineering, project management and commercial experience in gas markets, and Senior Associate Matt Paul, who joined EnergyQuest in December 2022 and has over 25 years’ experience in government and the oil and gas industry.
The Gas Market Intervention report is an independent key reference document for all stakeholders in the east coast gas market. The brochure, which contains the detailed Table of Contents, can be downloaded below. The report is available now. Further information is available by contacting Rick Wilkinson at 0417852779 or rwilkinson@energyquest.com.au