20 Jun 2024

Media Release: East coast gas production at full capacity but AEMO warning reinforces need for investment in new supply

East coast gas production is running at full capacity to meet the surge in gas demand for power generation that prompted the Australian Energy Market Operator (AEMO) to issue a warning overnight that gas supply on the east coast may be inadequate to meet peak winter demand.

In response to increased demand due to a cold snap in southern states, east coast gas production is operating at over 99 per cent capacity and Queensland gas producers are sending as much gas as possible south. According to AEMO, the pipeline connecting Queensland to southern states is running at 106 per cent capacity.

“Gas producers are doing everything they can to meet the heightened demand and to keep Australian households warm and businesses running,” Australian Energy Producers Chief Executive Samantha McCulloch said.

“However, peak winter gas shortages and a fragile electricity network should come as no surprise following repeated warnings from AEMO, the Australian Competition and Consumer Commission and other independent experts about gas supply shortfalls on the east coast of Australia and the urgent need for investment in new gas supply.”

Ms McCulloch said it is yet another reminder that governments must act with a sense of urgency to avoid winter shortfalls becoming the new normal, and to prevent the structural shortfalls that are forecast from 2028.

“The current situation also underscores the importance of gas power generation to keep the nation running and as the safety net we need as we transform our electricity system,” she said.

“Australia has abundant gas reserves but needs the political will to restore investment confidence and ensure timely approvals for much-needed new gas supply.”

“Regulatory certainty and stability is critical to support investment in the next generation of gas supply, all the way from exploration to production.”

“The Future Gas Strategy made it clear that gas is needed to 2050 and beyond. Now we need to see the clear, tangible actions from government to make this happen, including removing barriers to new gas projects, addressing approval delays and uncertainty, and ensuring the 2025 review of the Gas Market Code reestablishes an open, competitive gas market on the east coast.”

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