Snowy Hydro has struck a 25-year deal for the storage of gas, providing a government-backed contract to underpin an expansion of the east coast’s biggest gas storage plant.

The agreement with the Iona gas storage facility in Victoria underscores Canberra’s expectations that the fossil fuel will remain part of the energy mix past 2050. The plant, near Port Campbell, plays a critical role in keeping gas supply reliable to the east-coast energy market, particularly during periods of high demand.