Australia’s natural gas supply outlook has improved in recent months as near-term supply has improved, pushing back the expectation of extreme?peak-day?shortfalls in southern Australia to 2030, a year later than previously forecast, the Australian Energy Market Operator (AEMO) said on Thursday.
AEMO’s latest gas adequacy outlook shows improved near-term supply conditions, thanks to increased?peak-day?gas supply, new infrastructure investment, and reduced consumption forecasts, according to the operator’s latest gas adequacy outlook.
Total gas consumption is forecast to decline as households, businesses, and industry electrify, reducing their reliance on gas, AEMO said.
At the end of last year, the federal government unveiled plans to require exporters to reserve between 15% and 25% of gas production for the domestic market as of 2027.
Despite the improved near-term supply expectations, Australia needs investment for the longer-term supply, as gas production from legacy fields in the southern states is set to slump by 46% over the next five years, the operator noted.
"While the gas supply outlook has slightly?improved, it remains important that committed and anticipated gas?production, storage, and pipeline projects?are completed?on time,?alongside developments in the electricity market,” Nicola Falcon, AEMO Executive General Manager System Design,?said.
“Industry is considering a number of supply, storage, and transportation projects that are currently uncertain, which, if committed,?may delay forecast shortfalls,” Falcon ?added.?
The Australian federal government commented on AEMO’s updated gas supply outlook, saying that as more renewable energy and battery storage come online, gas is increasingly being freed up for the uses that need it most, including industry and firming the grid when required.
“For the first time in 2025, more than half the grid was powered by cheaper, cleaner energy that’s generated by renewables, backed by battery storage and gas peaking when needed, which puts downward pressure on energy bills,” Australia’s Minister for Climate Change and Energy, Chris Bowen, commented.
By Tsvetana Paraskova for Oilprice.com
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