The enormous amount of gas required by the Gladstone LNG plants indicates a further tightening of the east coast gas markets.
According to a recent article in The Australian, Victorian natural gas is being piped to Queensland through NSW and the central Australian Moomba gas hub from as far away as Bass Strait.
The article explains that effective export of Bass Strait gas indicates a further tightening of the east coast gas markets and is evidence that Queensland’s coal-seam gas fields and the Cooper Basin gas fields in central Australia are not providing enough early gas for the LNG projects.
Gas flows on the Moomba-to-Sydney gas pipeline has supplied NSW with gas since 1976. However, according to data from the Australian Energy Market Operator, the flow was reversed in December for the first time as the third of three gas export projects being built at Gladstone powered up.
Some of the projects are not yet at full capacity with the Santos-operated Gladstone LNG plant and the Origin/ConocoPhillips-operated Australia Pacific LNG project still to ramp up. Increased demand for the export market is therefore likely to be placed on southern gas.
Mick McCormack the managing director of the APA Group, which operates the Moomba-to-Sydney pipeline and the NSW-Victoria Interconnect pipeline that connects to it at Young, told The Australian, “Gas has been going what we call ‘down the hill’ for the last 40 years, heading to the southern market, but late last year, our first physical flow came the other way”. That’s very significant for APA and hugely significant for the gas market, Mr McCormack said
The southern state exports come amid mounting gas shortage concerns in NSW, where AGL Energy last week said it would walk away from its NSW coal-seam gas projects and all other gas exploration and production.