The Federal Government has announced the 2021 National Gas Infrastructure Plan (NGIP) and the accompanying Future Gas Infrastructure Investment Plan, aiming to identify a pathway for Australia’s gas supply and infrastructure up to the year 2041. 

The 2021 NGIP identifies actions to ensure more gas can be delivered at lesser cost, aiming to keep prices internationally competitive.

Key findings of the NGIP include:  

  • At least one new basin will need to be brought online before 2030 to meet projected east coast gas demand
  • Basins to unlock out to 2030, including the Narrabri Gas Project (NSW), the Beetaloo Sub-basin (NT), the Galilee Basin (QLD), and the North Bowen Basin (QLD)
  • Strategic expansions to existing pipeline capacity and the construction of entirely new pipelines, to transport gas supplies to east coast markets
  • Expanded transportation capacity from north to south, as northern supply expands and southern supply declines

The report said it presents a sequenced blueprint for the development of the east coast gas market over the next 20 years, identifying long-term development goals for gas supply.

The NGIP report said that the demand for gas in the east coast gas market to the mid-2030s is forecast to be relatively stable across all demand scenarios, with domestic customers and Liquefied Natural Gas (LNG) export contracts supporting continued production. 

The report outlines the modelling undertaken for this plan, which explored three demand scenarios:

  • The ‘Stable Demand’ scenario is based on the Australian Energy Market Operator’s (AEMO) 2021 Gas Statement of Opportunities (GSOO) ‘Central’ scenario
  • The ‘Grid Stability’ scenario assumes continued strong renewables adoption which causes gas powered generation (GPG) to play a more important role in power generation
  • The ‘Low Demand’ scenario reflects a lower demand for gas compared with the stable demand scenario, based on increased electrification, energy efficiency and hydrogen blending

The Future Infrastructure Investment Plan was released to complement the 2021 NGIP, acting as an investment framework and establishing principles for the Federal Government to focus on – and supporting private sector investment in infrastructure identified by NGIP.

The Investment Framework plans to provide targeted support to accelerate the development of critical gas infrastructure projects.

These reports follow the National Gas Infrastructure Plan: Interim Report (Interim NGIP) which was released on 7 May 2021, and identified priority infrastructure developments required to alleviate forecast southern gas supply shortfalls in the near-term.

Federal Government: NGIP signals pathway to unlocking new supply 

Minister for Industry, Energy and Emissions Reduction, Angus Taylor, said the NGIP signals to the market priority actions for ensuring affordable, reliable gas and provides a pathway to unlocking new supply. 

“The Morrison Government is serious about gas and acknowledges the important role it plays supporting jobs, food production, manufacturing, industry, exports and energy supply,” Mr Taylor said. 

“The National Gas Infrastructure Plan supports a strategic approach to gas infrastructure investment over the next 20 years and aims to guide industry to priority areas that need to be addressed to avoid a supply shortfall.

“This will ensure our domestic gas prices remain internationally competitive. The United Kingdom and Europe have experienced price increases over 400 per cent in recent months due to gas shortages.

“The Government cannot sit back and allow that to happen here. Australian prices have remained 60 to 70 per cent lower than prices in Asia and Europe even in light of this major energy shock. 

“Unlocking basins and getting gas to where it is needed will support our job-creating industries. Our focus on gas and energy security has helped to grow our manufacturing sector, which is now at more than one million jobs – levels not seen since 2009.”

The Federal Government will implement priorities in the NGIP through the Investment Framework, which lays out the principles for potential Government support. 

The Federal Government is also calling on industry to contribute to a new Expression of Interest (EOI) process to identify critical projects that require support to accelerate delivery.  

The EOI seeks submissions on critical mid-stream gas infrastructure projects that meet both the priorities identified in theNGIP and the principles of the Investment Framework.

APGA reacts to the reports 

The Australian Pipelines and Gas Association (APGA) has welcomed the release of the NGIP and the Future Gas Infrastructure Investment Plan.

APGA Chief Executive Officer, Steve Davies, said gas was the second largest source of energy in Australia, and demand was not forecast to decline for more than a decade, so ensuring reliable supply was crucial to future prosperity. 

“Natural gas is a major source of energy to the Australian economy,” Mr Davies said. 

“It currently provides 27 per cent of end use energy which is more than electricity and second only to liquid fuels. 

“While gas is on a decarbonisation pathway as set out in Gas Vision 2050, demand for natural gas is not forecast to decline until well into the next decade, at which time we expect renewable, zero carbon gases such as hydrogen and biogas will be replacing it.” 

The APGA said that the NGIP highlights the ongoing gas supply challenges facing energy users, and the potential for shortfalls in the mid-2020s. 

“The Future Gas Infrastructure Investment Plan lays out a framework that could accelerate the investigation and delivery of those projects, bringing new supply sooner to market and supporting gas users around the country,” Mr Davies said. 

“We are particularly pleased to see that the Future Gas Infrastructure Investment Plan principles include investigations to ensure new gas investments are hydrogen ready. 

“Leveraging Australia’s existing gas infrastructure to deliver renewable gas will be a major contributor to the decarbonisation of the economy and achieving net zero most quickly at lowest cost.” 

The broader industry reacts 

The Northern Territory’s peak environment body, the Environment Centre NT, has slammed the 2021 NGIP.  

The Environment Centre NT’s Co-Director, Kirsty Howey, said, “The Morrison Government’s announcement to turbo-charge development of the Beetaloo Basin using taxpayer money is catastrophic for the Northern Territory. 

“The International Energy Agency has made it clear that we can exploit no new gas fields if we are to avoid catastrophic climate change. 

“Fraccing the Beetaloo Basin will speed up the impacts of climate change, is opposed by Traditional Owners and the local community, and is unviable without huge subsidies. 

“Only last month, energy analyst firm Reputex released a report, finding that the costs of offsetting the emissions of Beetaloo fraccing through the purchase of Australian Carbon Credit Units (ACCUs) could be up to $22 billion, making the industry completely unviable economically. 

“Australians are fed up with public money being used to subsidise the fossil fuel industry, which exposes Australia to significant risk, not just from climate change but the economic liability of these gas fields becoming stranded assets, which the Reputex Report found could be likely.

“Only a few weeks ago the Environment Centre NT was in the Federal Court challenging the Federal Government’s grant of public funds to Imperial Oil and Gas to speed up fraccing in the Beetaloo Basin, including on the basis that the risks of climate change were not considered. 

“With today’s announcement we see the Morrison Government throwing more good money after bad. The Government is pledging yet more taxpayer support for an industry that can’t stand on its own two feet.

“And it’s clear from the Plan that Beetaloo gas will be going to the east coast, or offshore. There’s nothing in this plan for Territorians but catastrophic climate change.” 

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