Gas utility AGL has commissioned a study which concludes New South Wales is heading towards a supply cliff and could experience about 20 days of gas shortages from the winter of 2016.
Conducting the research, AGL’s Chief Economist and Professor of Economics at Griffith University Paul Simshauser, together with the company’s Head of Economics and Sustainability Tim Nelson, said they expected annual east coast gas demand to increase three fold from 700 petajoules to 2100 petajoules.
The company – which is currently lobbying the state government to secure approval on its Gloucester and Hunter Valley New South Wales CSG projects and also runs another CSG operation at Camden in Sydney’s west – said it was concerned about the reliance NSW had on imported gas.
The study analyses how the natural gas market will adjust as Queensland’s LNG projects ramp up and gas supply contracts in NSW mature.
This chart shows how the supply contracts (grey bars) are likely to fall short of the overall state demand starting in 2016 if they are not renegotiated.
AGL says that while households and small businesses are unlikely to experience a gas supply shortage it’s the larger gas intensive manufacturing businesses which will either have to pay higher prices or limit use.
“The problem that we identify is seasonal and spatial,” the report states.
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