AEMO sees a "finely" balanced Western Australia gas market
The Australian Energy Market Operator’s (AEMO) on December 14 said its annual gas outlook for Western Australia (WA) indicates a "finely" balanced domestic market until 2031, with potential supply from existing and prospective projects expected to meet forecast demand until at least the end of 2024.
The 2021 WA Gas Statement of Opportunities (GSOO) highlights a potential supply gap of 51 petajoules (PJ) between 2025 and 2027, at rates of up to 85 terajoules (TJ)/day, as depletion of reserves at existing facilities impact supply.
|
Advertisement: The National Gas Company of Trinidad and Tobago Limited (NGC) NGC’s HSSE strategy is reflective and supportive of the organisational vision to become a leader in the global energy business. |
“The peaks and dips observed in the 2021 WA GSOO indicate supply is expected to exceed demand until at least 2024, with the market tightening in the middle of the 10-year outlook period and then levelling out again from 2027,” AEMO’s WA markets group manager, Martin Maticka, said.
“The 2021 WA GSOO covers options to fill the potential gap, including drawing from WA’s existing gas storage, which can deliver up to 210 TJ/day, and developing domestic gas fields not currently in the forecasts, such as Corvus or Lockyer Deep,” he added.
Domestic gas contributions from Woodside Energy’s Scarborough project in mid-2027 are expected to return the market to surplus until 2030, delivering up to 210 TJ/day.
A positive outlook for major gas-consuming projects is forecast to lift demand at an average annual rate of 0.8%, increasing from 1,071 TJ/day in 2022 to 1,150 TJ/day in 2031. Global demand for WA’s commodities is driving much of this growth, with 15 resource projects commencing operation during the outlook period.
AEMO’s 2021 WA GSOO also highlights the interdependencies between the domestic gas and electricity markets, considering the impact additional renewable energy generation has on demand for gas-powered generation (GPG).
“Australia’s energy sector is going through a rapid transition, driven by changes in consumer behaviour and efforts to decarbonise the system,” said Maticka. “The strong linkages between Australia’s gas and electricity sectors mean that changes occurring in one sector will have an impact on the other.”
As renewable generation increases its overall contribution, the 2021 WA GSOO expects GPG to grow at an average annual rate of 0.4% across the outlook period in the South West Interconnected System (SWIS), a contrast to the 2020 WA GSOO outlook, which forecast a decline.
Australia's peak oil and gas body Appea said the AEMO report highlights the need to develop additional gas reserves in WA if the state is to meet increased demand for gas over the coming decade.
Appea WA director Claire Wilkinson said, “The report shows we’ll need more gas to meet our electricity needs as we replace coal, while our critical mining sector will also need more gas to meet the increasing demand for WA minerals.”
“Developing new gas resources is not a given and bringing projects to fruition is a complex technical and commercial challenge. The state government needs to ensure it provides clear policy settings and an efficient regulatory system to encourage investment in responsible resource development," Wilkinson added.