The Australian Government has released the National Gas Infrastructure Plan: Interim Report (Interim NGIP) which provides a blueprint of infrastructure requirements for Australia’s east coast gas market to 2027 and identifies four critical infrastructure projects that are required to progress so the shortfall is not realised.
The projects included in the Interim NGP are two gas storage projects at Golden Beach and Iona in Victoria; the expansion of the South West Victorian pipeline; and an import terminal project, with the Port Kembla project considered the most advanced.
The Federal Government has committed $58.6 million in funding in the 2021-22 Budget to continue to advance the work of its gas-fired recovery. This includes:
- $38.7 million of early works support for critical gas infrastructure projects;
- $3.5 million for the development of a long-term Future Gas Infrastructure Investment Framework;
- $4.6 million to develop initiatives that empower gas reliant businesses to negotiate competitive outcomes, which includes developing a voluntary standardised contract framework with industry;
- $6.2 million to design, consult and implement reforms to continue accelerating the development of Wallumbilla as Australia’s Gas Supply Hub; and
- $5.6 million to develop a further National Gas Infrastructure Plan for 2022.
Minister for Energy and Emissions Reduction, Angus Taylor, said gas is a critical enabler of Australia’s economy and helps to support the nation’s manufacturing sector which employs over 900,000 people.
“Our National Gas Infrastructure Plan: Interim Report demonstrates the importance of infrastructure to overcoming the forecast gas shortfall,” he said.
“The Government will not sit back and allow the shortfall to eventuate – the risk to the economy is too great. Without action to address supply, industry and households will be faced with higher prices, disruptions in supply and unplanned outages.”
“Future NGIPs and the new Investment Framework will also provide greater certainty for Australian business and consumers, which will help keep downward pressure on prices that underpins our economic competitiveness.”
The Australian Pipelines and Gas Association (APGA) welcomed the release of the Interim NGIP.
APGA Chief Executive Officer, Steve Davies, said: “Maintaining gas supply depends on increased private sector investment both in new infrastructure and on expansions of existing infrastructure and it is vitally important that government facilitates this. The release of the interim NGIP is an important milestone.”
He said a stable environment that recognises the risks and competition investors face when making long-term decisions will help the market deliver the next wave of investment to secure Australia’s gas supply into the future.
“Industry has an excellent track record of delivering infrastructure investment when and where it is needed. In recent weeks, there have been significant announcements and major projects being actively explored across the sector,” Mr Davies shared.
“The interim NGIP also highlights the lynchpin role gas power generation plays in the National Electricity Market. Gas-powered generation that is connected to the gas pipeline network can allow very high renewable electricity systems (90 per cent or more) to function reliably at much lower cost than they would otherwise.”
“Studies increasingly show that maintaining gas-powered generation at current levels will deliver faster and cheaper decarbonisation of the electricity sector and the interim NGIP anticipates this in its demand forecast,” he said.
“While the interim NGIP is focused on securing gas supplies in the coming years, it also recognises that the industry is actively pursuing technology to enable the delivery of decarbonised gas such as hydrogen and biomethane as soon as possible, as set out in Gas Vision 2050. It is great to see that future NGIPs will include this in its considerations.”