The Australian Energy Market Operator (AEMO) today published the 2023 Western Australian (WA) Gas Statement of Opportunities (GSOO), which forecasts domestic natural gas demand to increase by an average of 2.2% annually between 2024-33, while supply is expected to decline 0.9% on average each year over the same period.
Published annually, the WA GSOO provides a 10-year forecast of demand and supply within WA’s domestic gas market. In doing so, AEMO assesses the gas that could be made available to the state’s domestic market given forecast prices and production costs, which is capped by available processing capacity and gas reserves.
AEMO Executive General Manager WA & Strategy Kate Ryan said this year’s report reaffirms both the opportunity for investment in additional gas supplies and the critical role of gas in supporting the state’s energy transition to net zero.
“The 2023 WA GSOO identifies an increasing need for investment in additional gas supply into the state's domestic market.
“While there are many offshore and onshore undeveloped projects that could supply the WA domestic market, these projects are currently too speculative to include in the potential supply forecasts,” Ms Ryan said.
New supply that is expected to come online in this year’s outlook comes from Strike Energy’s South Erregulla development in mid-2026, Woodside Energy’s Scarborough project (2027), Mineral Resources’ Lockyer Deep asset (2028) and Beach Energy and Mitsui’s Waitsia stage two joint venture (2029).
“Despite these new projects coming online, AEMO has identified the need for new gas supply to meet forecast demand under all scenarios,” Ms Ryan said.
"The expected supply shortfalls are underpinned by declining production from existing WA gas fields and the increasing use of gas for industrial processing as well as electricity generation in the state’s major power system as the energy transition progresses.”
As a result, from 2031 onwards, the WA domestic gas market is anticipated to experience a deficit exceeding 100 terajoules per day, which equates to more than 10% of demand each year.
Similar to the 2022 WA GSOO, this latest report reinforces the tight supply-demand conditions in the domestic market and showcases the rising interlinkages between gas and the state’s main grid, the South West Interconnected System (SWIS).
This also follows the 2023 Wholesale Electricity Market Electricity Statement of Opportunities report published in August, which predicted electricity demand in the SWIS will continue rising due to electrification, electric vehicle uptake, and emerging new energy-intensive industries including green hydrogen.
While some of these trends will lead to reduced gas consumption, the 1.6 gigawatts of coal-fired plant retirements over the next 10 years, and rising electricity demand will require more gas-powered generation (GPG) in the SWIS.
“Demand for gas to generate electricity in the SWIS is anticipated to grow at a 5.8% average annual rate from 2024,” Ms Ryan explained.
“As such, timely investments in new gas developments are needed to maintain a secure and reliable energy system.”
While the latest report highlights the need for investment in new gas supply, it does point to options that could potentially alleviate some of this forecast shortfall in the near term, including drawing from the 42 petajoules of existing gas in storage, and diverting uncontracted LNG spot cargoes from the export market into the domestic market.
- ENDS -