Australia finally has enough gas to meet domestic demand

A liquefied natural gas (LNG) tanker arrives at a gas storage station east of Tokyo. (STR / AFP / Getty Images)
  • No supply gaps in gas are forecast before 2030 despite Australia about to become the biggest exporter of liquefied natural gas (LNG) in the world.
  • Domestic supply in eastern and south-eastern Australia will also be enhanced by connection to the Northern Territory gas fields through the Northern Gas Pipeline.
  • The federal government can now impose export restrictions to avoid a shortfall in meeting domestic demand for gas.

Australian will have enough gas to meet domestic demand, despite increasing exports of LPG, up to 2030, according to analysis by the Australian Energy Market Operator.

The risk of shortfalls, which pushed up prices for Australian households and flowed on to higher electricity bills, has been reduced due to changes in the market.

“There are no gas supply gaps forecast in 2019, or in the short term, under expected conditions,” says the Australian Energy Market Operator in its 2018 Gas Statement of Opportunities.

The Australian Energy Market Operator. says the eastern and south-eastern Australian gas markets have been irrevocably changed by liquefied natural gas (LNG) exports and the coupling of the Australian gas market to international markets.

“The scale of gas used for export has led to a tightening of domestic supply,” it says.

However, the Federal Government has brought in the Australian Domestic Gas Security Mechanism, under which the Federal Minister for Resources can order export restrictionsto avoid a shortfall in meeting domestic demand for gas.

Domestic supply in eastern and south-eastern Australia will also be enhanced by connection to the Northern Territory gas fields through the Northern Gas Pipeline to be completed by the end of the year.

Executive General Manager, Planning and Forecasting, David Swift, says a global oversupply of LNG capacity and the emerging spot Asia-Pacific LNG market means that international buyers are forecast to source less gas from Australian LNG producers in the short-term.

“Coupled with the current supply conditions on the east coast, this will mean that LNG producers will be able to provide up to eight petajoules more than previously expected to the domestic market, which is a minor, but favourable addition to the east coast’s dynamic supply demand balance,” he says.

Image: Australian Energy Market Operator

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