Australia's East Coast Will Face 133 PJ of Gas Shortfall by 2019

Australian east coast is likely to face gas shortfall of 133 petajoules by 2019, according energy economics group, EnergyQuest.

In its May 2015 Quarterly report, EnergyQuest says that Australian Energy Market Operator’s (AEMO) 2015 Gas Statement of Opportunities report not only paint an unrealistically optimistic picture of gas supply for domestic use in the region but brush aside public and industry concerns about the expected tightening supply of gas for domestic use along Australia’s east coast.

Such a complacent view from the country’s official energy forecaster, runs the risk EnergyQuest says, of discouraging urgently needed east coast gas development, particularly in NSW and onshore Victoria.

“First, AEMO’s estimates of demand for gas by the Queensland LNG projects appear to us to be too low and would be insufficient for them to meet their contracts,” EnergyQuest Chief Executive, Dr Graeme Bethune said at World Gas Conference in Paris on Sunday. “Second, AEMO’s estimates of production from the Cooper Basin are too high, higher than the producing companies themselves expect, particularly in view of cuts to capital spending due to the fall in the oil price.

“Third, AEMO significantly under-estimates gas reserve risk, relying on production from fields to which geoscientists might only assign a probability of success of 10% or which are not yet demonstrated to be technically or economically producible.”

“Federal and State Governments have internationally respected geoscience agencies but there is little sign that this expertise has been called upon by AEMO in preparing the GSOO.

“Correcting for these factors changes the east coast gas demand and supply balance from AEMO’s meagre surplus of 22 petajoules (PJ) in 2019, to a 133 PJ shortfall in that year. A significant short-term supply gap has re-emerged, which increases to over 200 PJ per annum early next decade.