On 15 September 2020, Prime Minister Scott Morrison announced the Federal Government will reset the east coast gas market and create a more competitive and transparent Australian Gas Hub by unlocking gas supply, delivering an efficient pipeline and transportation market, and empowering gas customers.
The Government plans to get more gas into the market by:
- Setting new gas supply targets with states and territories and enforce potential ‘use-it or lose-it’ requirements on gas licences;
- Unlocking five key gas basins starting with the Beetaloo Basin in the NT and the North Bowen and Galilee Basin in Queensland, at a cost of $28.3 million for the plans;
- Avoiding any supply shortfall in the gas market with new agreements with the three east coast liquefied natural gas (LNG) exporters that will also strengthen price commitments;
- Supporting the CSIRO’s Gas Industry Social and Environmental Research Alliance with $13.7 million; and
- Exploring options for a prospective gas reservation scheme to ensure Australian gas users get the energy they need at a reasonable price.
The Government plans to boost the gas transport network by:
- Identifying priority pipelines and critical infrastructure as part of an inaugural National Gas Infrastructure Plan (NGIP) worth $10.9 million that will also highlight where the government will step in if the private sector doesn’t invest;
- Reforming the regulations on pipeline infrastructure to promote competition and transparency; and
- Improving pipeline access and competition by kick-starting work on a dynamic secondary pipeline capacity market.
Moreover, to better empower gas consumers, the Government plans to:
- Establish an Australian Gas Hub at the nation’s most strategically located and connected gas trading hub at Wallumbilla in Queensland to deliver an open, transparent and liquid gas trading system;
- Level the negotiating playing field for gas producers and consumers through a voluntary industry-led code of conduct, to be delivered by February 2021;
- Ensure Australians are paying the right price for their gas by working with the ACCC to review the calculation of the LNG netback price which provides a guide on the export parity prices; and
- Use the NGIP to develop customer hubs or a book-build program that will give gas customers a more transparent and competitive process for meeting their needs.
The Prime Minister also announced that the Government will deliver more Australian gas where it is needed at an internationally competitive price.
“We’ll work with industry to deliver a gas hub for Australia that will ensure households and businesses enjoy the benefits of our abundant local gas while we hold our position as one of the top global LNG exporters,” he said.
Minister for Energy and Emissions Reduction Angus Taylor said reliable and affordable gas was more important now than ever.
“A gas-fired recovery will help Australia’s economy bounce back better and stronger while supporting our growing renewable capacity and delivering the reliable and affordable energy Australians deserve,” Minister Taylor said.
“We are building a robust and competitive gas industry that will allow both gas producers and users to thrive, with lower prices and lower emissions benefiting all Australians.”
Minister for Resources, Water and Northern Australia Keith Pitt added the Government’s Gas Plan would drive job creation and economic growth in northern and regional Australia.
“This commitment will encourage investment to unlock Australia’s vast resources potential – boosting exports, jobs and energy supplies,” he said.
The Prime Minister further announced that the Federal Government will work with state governments through a program worth up to $250 million to accelerate three critical projects – the Marinus Link, Project Energy Connect and VNI West interconnectors.
“These links will help put downward pressure on prices, shore up the reliability of our energy grid and create over 4,000 jobs,” Mr Morrison said.
Together with existing support for HumeLink and the QNI Interconnector, this means that the Government is accelerating all priority transmission projects identified in the AEMO Integrated System Plan.