EnergyQuest urges governments to address east coast gas shortfall as energy crisis looms
Leading Australian oil and gas research firm EnergyQuest says governments need to devise a new strategy to address a significant looming shortage in gas supply on the east coast.
In a report titled “Time for a Plan B?”, EnergyQuest stated that the market still faces the same issues it forecast in 2019—a shortfall in east coast gas supply beginning in 2026 that will escalate in 2028.
Shortfall concerns remain
EnergyQuest noted recent reports from the Australian Energy Market Operator and the federal government’s Future Gas Strategy confirm the forecast shortfall remains a concern.
“It is now clear that whatever we have been doing has not addressed the looming 2028 shortfall [and] we have less than four years to find the answer,” EnergyQuest wrote in its new report.
“Plan A, which involved letting the market work its way through or waiting for the market and governments to realise they really need more gas, has failed and we have run out of time.”
“What are the options for Plan B?”
According to EnergyQuest, any Plan B will require several actions including developing more gas.
However, it fears there are not many fields or discoveries that can be added in time.
NSW offshore ban not helping
One of the issues significantly impacting the potential to find and commercialise new gas production has been government interference—with NSW as a major roadblock.
For BPH Energy (ASX: BPH) and its investee company Advent Energy, the NSW government’s decision to halt all oil and gas activities off its coastline is just another impediment in their plans to test the significant gas potential in the PEP 11 permit.
It is looking increasingly likely that the issue will end up in the courts as BPH and Advent are convinced PEP 11 lies outside NSW’s jurisdiction in commonwealth waters.
Recognising the need to bring in new gas supplies, the two companies continue to push forward with plans to bring in a drilling rig to test PEP 11’s hydrocarbon potential.
All the same, for the gas-deprived east coast market, the regulatory delays are far from what is needed.
Queensland leading the way
In the seemingly more petroleum industry-friendly state of Queensland, Blue Energy (ASX: BLU) is preparing to move to the next stage of development at its key gas projects.
Blue recently stepped up activities at its Sapphire gas pilot project in the Bowen Basin, a project that has the potential to supply significant gas volumes to key domestic markets.
The company also executed a non-binding heads of agreement with AGL Energy (ASX: AGL) in February for the supply of up to 300 petajoules of gas deliverable at Wallumbilla over ten years from the company’s Northern Bowen Basin ATP814 coal seam gas tenure.
The agreement with AGL represents another foundational gas volume that could contribute to the underpinning of the proposed gas pipeline from the North Bowen Basin to the Wallumbilla Hub and for the development of Blue Energy’s gas resources and the broader North Bowen Basin.
The ATP814 permit has been independently assessed by consulting firm NSAI to contain more than 3,619PJ of recoverable resources.
Vintage Energy playing its part
Vintage Energy (ASX: VEN), a relative newcomer among Australia’s oil and gas producers, continues to have success in its plans to find and supply new gas reserves for the east and south coast markets.
The company currently has the Vali and Odin fields in South Australia and Queensland supplying gas to meet growing demand.
Vintage’s recent successful appraising of the eastern flank at its Odin gas discovery proves that with the right opportunities provided, companies can quickly find and bring new gas supplies to market.