
EnergyQuest’s latest report, titled West Coast Gas Outlook 2024 – Calm before the storm?, reveals that while Western Australia’s domestic gas market appears stable in the short term, significant supply challenges loom on the horizon.
According to the report, Western Australia’s domestic gas market is likely to experience substantial supply shortfalls beginning in 2029.
This forecast comes despite the state government’s decision to maintain its current Domestic Gas Policy without major alterations for the next four years.
The outlook for gas supply into the 2030s is particularly critical, as Western Australia’s large gas users are not expected to reduce their consumption over the next decade.
For many industries, gas remains the only viable option, with low-emission alternatives still in development and unlikely to be widely implemented in the near future.
Adding to the complexity of the situation is the Western Australian government’s policy to phase out coal-fired power generation.
This move is anticipated to significantly increase demand for domestic gas at a time when supply is projected to peak and begin declining.
While new supply from the Scarborough project and Perth Basin will play a crucial role in the coming years, options for increasing domestic supply beyond these projects appear limited.
The report suggests that greater reliance on LNG exporters may become necessary to meet future demand.
EnergyQuest highlights several factors contributing to the supply challenges:
- Low exploration levels across Western Australia and Australia as a whole
- A scarcity of undeveloped gas resources not linked to LNG projects
- Difficulties in reducing demand without risking project closures due to lack of alternatives
- Increasing challenges and uncertainties in developing new LNG resources with domestic supply obligations
- The decline of the North West Shelf, which has historically been a cornerstone of Western Australia’s gas supply
The report extends its supply and demand forecasts to 2050, revealing that the structural shortfall expected from 2029 could become substantial in the coming decades.
It notes that aggressive assumptions would be required to significantly reduce gas demand by 2050, and if carbon capture and storage technologies are adopted by major gas users, demand is likely to remain resilient.
As Western Australia navigates the complexities of its energy future, the insights provided by the West Coast Gas Outlook 2024 will undoubtedly play a crucial role in informing policy decisions and industry strategies in the years to come.