McKinsey report puts $50 billion price tag on Australian gas security

AUSTRALIA will need an additional $10 billion in new natural gas developments on top of the $40 billion of investment already planned by 2030.

The McKinsey report has found the east coast of Australia faces a gas shortage over the next 15 years.

AUSTRALIA will need an additional $10 billion in new natural gas developments on top of the $40 billion of investment already planned by 2030 to meet demand, a new study has shown.

New gas developments in Queensland could be key to solving the shortfall.

The McKinsey & Company report has found the east coast of Australia faces a gas shortage over the next 15 years, with a potential shortfall of up 465 petajoules (PJ) a year

The report says to keep gas prices as competitive as possible, east Australia needs to develop more supply or reduce gas demand.

Released to coincide with a major gas industry conference in Sydney this week, the report found the east coast has sufficient undeveloped resources to meet the demand.

McKinsey senior expert and report co-author Peter Lambert said much of the increased supply could potentially come from Queensland.

“It has a substantial amount of undeveloped resources. We think that could contribute between 300-350 PJ (of the shortfall),” Mr Lambert said.

The report found without increased supply, reducing gas demand through energy efficiency and fuel switching could be required.

“As an energy sector overall, we need to make a decision about which of the options we prefer,” Mr Lambert said.

Prime Minister Malcolm Turnbull will meet with gas industry leaders, including Queensland LNG exporters Santos, Shell and Asia Pacific LNG, on Wednesday on the sideline of the 2017 Australian Domestic Gas Outlook conference in Sydney.

Mr Turnbull last week called the urgent meeting following the release of an Australian Energy Market Operator (AEMO) report which found the nation faced an energy crisis with electricity and gas shortages in just a few years unless new measures were taken.

Meanwhile, the Clean Energy Finance Corporation (CEFC) yesterday announced a $77 million investment in three new solar projects in Queensland and Victoria, including two 57.5MW solar fields north of Collinsville, the Whitsunday Solar Farm and the Hamilton Solar Farm.

The two solar farms are expected to power an expected 62,000 homes from early 2018.