The Australian government has announced new gas supply commitments to shore up the domestic supply of gas, critical for Australian manufacturing, and supporting reliability as households and businesses ramp up low-cost renewables.
Two new enforceable supply commitments from Woodside and Esso will add more than 260 PJ of gas between now and 2033 under the federal government’s Gas Code of Conduct exemptions framework. This is enough to power east-coast gas-fired power stations for approximately two and a half years.
The new supply is in addition to the commitments made by Senex and APLNG in November 2023 and brings the total volume of gas secured through the Gas Market Code commitments to 564 PJs.
Climate Change and Energy Minister Chris Bowen said: “We know that gas is critical to supporting a lower-cost, more renewable grid as aging coal exits, and to support Australian manufacturing — which is why we’ve delivered this code to shore up energy reliability and affordability after a decade of chaos.”
The supply ensures households and industry can increasingly benefit from the downward pressure on wholesale electricity prices that solar is already bringing.
The gas will directly feed into southern demand centres previously identified as being at particular risk of seasonal shortfalls and ensure there is sufficient domestic supply to keep the downward pressure on gas prices.
Other exemption applications under the Gas Market Code are also being assessed — the mandatory Gas Market Code of Conduct came into force in July 2023 and will be reviewed no later than 2025.
Resources Minister Madeleine King said: “Gas is essential to supporting the nation’s energy grid and the reliable supply of gas is crucial to keeping energy prices down for households and businesses.
“Gas is our insurance policy for the energy grid as we move to cleaner and greener renewables, [it] is also indispensable in the processing of critical minerals and technologies such as wind turbines and solar panels.
“Importantly, this agreement underlines the continued importance of the Bass Strait in supplying and supporting the east-coast energy network,” said King.
