Sydney, 10 January (Argus) -- Tight gas supply eased in Australia's eastern states during 2024, with a surplus higher than previously anticipated likely this year, according to the Australian Competition and Consumer Commission (ACCC).
The ACCC's Gas Inquiry December 2024 interim report anticipates a 77-112PJ (2.1bn-3bn m³) surplus, driven by larger than expected supply from Queensland state's coal-bed methane projects.
The projections show a surplus in each quarter of 2025, including in the peak-demand winter months, if LNG projects export all their available uncontracted gas. This compared with the ACCC's September report which showed a possible July-September shortfall.
But a 16PJ supply gap is predicted for the southern states of South Australia, Victoria and New South Wales (NSW), which will need to be managed with careful usage of storage. But this does not account for the 2,880MW Eraring coal-fired generator's lifetime extension, which will reduce gas-fired power demand in 2025, the report said.
The ACCC is predicting a supply of 1,982PJ in 2025, higher than 1,946PJ in its July report, with demand at 1,871PJ compared to 1,836PJ previously. The exact surplus figure depends on the export quantities from the LNG projects based at Gladstone, with 77PJ of surplus if projects export all their presently uncontracted gas.
Gas will need to be transported south from Queensland as usual in the winter months, the ACCC said, with about 9pc of customer demand to be unmet. The 26PJ Iona gas storage site in Victoria held 16.06PJ on 2 January, up from 15.11PJ a week earlier on 26 December, with the ACCC recommending at least 25PJ to be stored before May to maximise levels ahead of winter.
The improved outlook reflects Australia's growing coalbed methane output, with production reaching a new monthly high of 3.57bn m³ in August, according to Australian Petroleum Statistics. An average of 3.49bn m³/month was supplied in the first 10 months of 2024, or 26pc of Australia's total average monthly gas production of 13.51bn m³. This compared to 25pc of the total in 2023 and 24pc in 2022.
Domestic gas prices have softened, the report said, because of higher supply and lower global prices but remain above historical levels. Offers from producers for 2025 supply fell by 1.8pc from the previous six months to A$14.77/GJ ($9.15/GJ) in the first half of 2024, while bids fell by 6.6pc to A$13.48/GJ.