Re: AGL’s “Community Update” Announcing Delays At Crib Point

AGL Employee

Hi @RotasQuare 

 

Continuing to highlight that Australia is the largest export of LNG in the world, while not also making it clear that these exports are from northern Australia which is not adequately linked with the south eastern states is misleading. This is known as exclusionary detailing and is a type of misrepresentation by either omitting certain facts or by failing to correct a key misconception.

 

The full picture of Australia’s gas market is that the reason we are now one of the largest exporters of gas is because of the gas being exported from gas reserves in the north west and north east of the country. While the isolated south eastern states face gas shortages.

 

The figure below highlights in yellow the location of demand centres in the most densely populated, and colder, south-eastern states in Victoria, New South Wales and South Australia compared with the location of the most abundant gas reserves serving LNG export facilities in the north west and north east of the country.

 

Gas locations 2.JPG

 

Due to the vast distance across the continent, Australia’s largest population centres in the east are not connected to the gas reserves and LNG production plants in the northwest. The east coast market has only connected from Queensland in the northeast, down to Melbourne and Tasmania at the south-eastern tip of the country. Most recently, with the addition of the Northern Gas Pipeline, the east coast gas network is now connected to gas reserves in the Northern Territory.

 

The only pipeline that connects Queensland to the southern states is the South West Queensland Pipeline which has maximum capacity of 384TJ/day, flowing from Queensland to southern states and it is already close to being fully utilised during Australia’s winter months. Therefore, gas from the Queensland coal seam gas resources is limited by pipeline constraints and wouldn’t be able to meet winter demand even if the currently exported gas was made available.

 

It is not only AGL’s view that gas markets in Australia’s south-east face declining production from local gas sources in the Gippsland and Otway Basins in Bass Strait.  It is the view of Australian Energy Market Operator (AEMO).

 

The latest AEMO 2019 Gas Statement of Opportunities (GSOO), released on 28 March 2019, said the east coast gas market faces tight supply from 2021 and shortfalls from winter 2024 if more is not done to replace rapidly declining output from Bass Strait and supplies from Queensland limited by pipeline capacity.

 

‘‘Southern Australia’s overall supply demand balance for 2021-2023 remains very finely balanced, reflecting the ever-tightening integration of Australia’s electricity and gas markets in the context of an evolving and dynamic energy system,’’ AEMO’s chief system design and engineering officer Alex Wonhas told the ‘Australian Financial Review’ when the report was published.

 

The report said:

“Supply from existing and committed gas developments is forecast to provide adequate supply to meet gas demands until 2023. However, risks remain that any weather-driven variances in consumption or electricity market activity that could increase gas demand, creating potential peak-day shortages as outlined in AEMO’s 2019 Victorian Gas Planning Report.” (AEMO GSOO 2019, p.3)

 

As production from southern fields further declines, and pipeline capacity from Queensland becomes fully constrained, AEMO forecasts supply gaps from 2024, requiring new infrastructure development, new commitments to develop reserves and contingent resources, or the discovery and development of prospective resources in the south to meet forecast demand” (AEMO GSOO 2019, pp.6-7)

 

And,

“From 2024, major southbound pipeline infrastructure upgrades would be required to deliver more gas from northern to southern states (predominantly over the winter months when southern demand is highest). AEMO forecasts potential for supply gaps from 2024 onwards, unless additional southern reserves and resources, or alternative infrastructure, are developed.”  (AEMO GSOO 2019, p.3)

 

The report also said within the next five years, domestic gas demand, particularly in the southern states, will be difficult to meet in its entirety without either:

 

  • Exploration and development of new southern resources, or
  • New gas supplies delivered via LNG import terminal, or
  • Major pipeline infrastructure expansions to deliver Queensland and Northern Territory gas southwards, or
  • A combination of all three.

It also supported a Victorian-based LNG import terminal and said:

 

 “Without any upgrade to the existing pipeline infrastructure: An import terminal in Victoria, either Melbourne or Gippsland, has the biggest projected impact to reduce projected shortfalls. In addition to providing an additional unconstrained source of gas for Victoria, this terminal is projected to reduce pipeline and storage infrastructure congestion, enabling greater access to supply from northern fields.”(AEMO GSOO 2019, p.55)

 

We are very aware that Western Port is an environmentally sensitive area and many areas within it are covered by the Ramsar international convention on the protection of wetlands. We are also very aware of the local concerns about the potential marine impacts of the project.