Australia’s upstream industry stepping up gas game with reform proposals

Australian Energy Producers (AEP), representing the country’s upstream oil and gas exploration and production industry, has come up with a set of proposals aimed at boosting Australia’s natural gas arsenal.

With a submission of a prospective reservation policy to the Gas Market Review as part of a suite of actions to deliver more gas supply to the domestic market and provide certainty to gas producers and users, Australian Energy Producers highlighted a need for a collaborative approach to ensure enduring and sustainable solutions to future-proof the gas market and break the cycle of short-term fixes, market interventions, and looming shortfalls.

Samantha McCulloch, Australian Energy Producers’ Chief Executive, commented: “The Government’s Future Gas Strategy makes it clear that natural gas will remain critical to Australia’s energy security through to 2050 and beyond. This requires a strong, stable and competitive east coast gas market that delivers more gas when and where it’s needed, while providing certainty for existing and future investment.”

According to McCulloch, a well-designed, prospective reservation policy linked to new supply, which could support a competitive and well-supplied domestic gas market, needs to be backed by actions to increase supply and address near-term market pressures. She believes that a strong LNG sector is critical for Australia’s energy security, as Queensland’s gas exports are expected to keep underpinning investment in new gas supply and providing flexibility for the domestic market.

McCulloch emphasized: “This should include reforms to encourage more investment, streamline approvals, remove reporting duplication, and facilitate expanded gas pipeline and storage capacity. Actions must also support a robust LNG sector which goes hand-in-hand with a well-supplied domestic market. Australia’s abundant natural gas resources have underpinned decades of economic growth, providing generations of Australians with reliable and affordable energy.

“With the right policy settings, we can encourage the investment needed to grow the market and ensure ample gas is available to meet Australia’s long-term energy demand and remain a reliable energy partner in our region. Industry stands ready to work with governments and energy users to safeguard Australia’s future energy needs, put downward pressure on prices and ensure Australia’s vast energy resources remain a major competitive advantage for our economy.”

As a result, Australian Energy Producers has recommended a three-track approach to ensuring a reliable and affordable natural gas supply, which encapsulates establishing a prospective east coast gas reservation, that is flexible, prospective and linked to new supply, accompanied by immediate action to support new gas supply, aligned to future domestic gas demand, allows the market to determine prices, minimizes sovereign risk and ensures Australia remains a reliable energy partner to the region.

The country’s oil and gas industry outlines the need to sunset the Gas Market Code, heads of agreement, and Australian Domestic Gas Security Mechanism in parallel with gas market reforms; establish a sustainable gas exploration program; and ensure the importance of natural gas and carbon capture, utilization, and storage (CCUS) is reflected across energy and climate policies.

Several actions have been spotlighted to accelerate additional gas supply and streamline approvals, including fast-track ‘development-ready’ gas supply, streamline and strengthen approvals for new and expanded gas projects, and facilitate an increase in pipeline and storage capacity.

Aside from these, streamlining short-term market operations and removing duplication and harmonizing gas market reporting have been pinpointed as immediate steps to improve market functioning and efficiency, as the market transitions.

𝐏𝐨𝐰𝐞𝐫 𝐘𝐨𝐮𝐫 𝐁𝐫𝐚𝐧𝐝 𝐖𝐢𝐭𝐡 𝐎𝐟𝐟𝐬𝐡𝐨𝐫𝐞 𝐄𝐧𝐞𝐫𝐠𝐲 ⤵️

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