By Nick Toscano
One of the eastern seaboard’s biggest gas suppliers, backed by billionaire Kerry Stokes, has flagged support for new rules requiring producers to set aside certain volumes of gas for domestic buyers amid mounting concerns that homes and businesses face a growing threat of winter shortfalls.
Adelaide-based Beach Energy on Wednesday called on the wider industry to bring “more constructive ideas to the table”, including a reservation mechanism for any new gas projects, while pointing out the success of Western Australia’s long-running gas reservation scheme. Beach Energy’s largest shareholder is Stokes’ Seven Group.
Beach Energy is using the Ocean Onyx drill rig to develop new natural gas wells off the coast of Victoria.
“You only have to look to Western Australia to see that domestic reservation delivers lower energy prices, supply certainty and a clear policy framework,” Beach chief executive Morne Engelbrecht said.
“Has it slowed investment? No.”
Beach Energy operates onshore and offshore gas production and supplies about 12 per cent of gas demand in the east-coast market via its Otway Gas Plant near Port Campbell and the Lang Lang Gas Plant south-east of Melbourne.
All of Beach’s east-coast gas is delivered domestically, while its Waitsia liquefied natural gas (LNG) project in WA is subject to the state government’s domestic reservation requirement.
Engelbrecht told the Australian Domestic Gas Outlook conference in Sydney that the introduction of an east-coast reservation scheme could help deliver a “long-term pipeline of more gas to Australian customers”.
“Rightly or wrongly, Australians feel they are entitled to a share of our nation’s resources – beyond just royalties,” he said. “At very least, domestic reservation would help to curb the perception that all of our gas is shipped offshore – when we know this is not the case.”
His comments come as a rift has opened between Australia’s eastern states over fresh warnings of winter gas shortfalls, with opinions split over the need for reservation schemes or new gas fields.
Resources minister Madeleine King wants NSW and Victoria to develop their own gas supplies.Credit: Alex Ellinghausen
As gas fields in the Bass Strait– which have traditionally supplied the bulk of east-coast gas demand – rapidly dry up, the Australian Energy Market Operator (AEMO) said there would be a risk of shortfalls across the nation’s south-east on days of peak winter demand until 2026. By 2027, states including Victoria, NSW and South Australia would face yearly gas supply deficits unless new gas supplies were made available, it said.
The Andrews government this week rejected the suggestion that more gas supply was needed to prevent shortages, and instead argued a domestic gas-reservation policy should be set up to stop Queensland’s liquefied natural gas (LNG) companies from shipping too much supply offshore.
“There should be no shortage of gas in Australia as we export over 70 per cent of what we produce,” a government spokesperson said. “This is not a supply issue, this is companies putting profit before people.”
However, federal Resources Minister Madeleine King declared she wants NSW and Victoria to develop their own gas supplies.
“We have been very upfront about wanting to work with state and territory governments about securing gas supply,” King said.
“There may be work the Commonwealth and Victorian governments can do together to unlock additional supply.”
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