The Australian Energy Market Operator’s 2016 Western Australian Gas Statement of Opportunities report released in December 2016 highlights that, assuming the continued development of gas reserves, Western Australia’s domestic gas market is expected to be well supplied over the next 10 years.
The Western Australia Gas Statement of Opportunities (WA GSOO) includes forecasts of gas demand and supply, an overview of gas infrastructure in the state, and emerging issues affecting the gas industry. It is designed to assist gas market participants and other energy industry stakeholders to identify any potential shortfalls, constraints, and opportunities in the WA natural gas sector.
Under its base scenario, the Australian Energy Market Operator (AEMO) forecasts that current and ‘in development’ gas production facilities would be able to meet demand over the outlook period. Based on current production rates of domestic gas and liquefied natural gas (LNG), proved and probable reserves are expected to last until 2035. Assuming the continued development of gas reserves, domestic gas supply in WA could exceed demand by at least 88 terajoules (TJ) per annum over the 10 year outlook period. The AEMO report highlights however that, should there be delays in the commencement of the Wheatstone domestic gas production facility, the domestic market could become tight in 2017 or 2018.
The key findings of the 2016 WA GSOO are:
- Gas supply in WA is expected to exceed demand over the next 10 years, assuming the continued development of gas reserves.
- Beyond 2021, continued expenditure to develop reserves may be required to ensure domestic production facilities have sufficient gas reserves to operate.
- Growth in domestic gas demand is forecast to be around 0.1% over the outlook period as only a handful of large gas consumers are expected to enter the market over the 10-year horizon.
- There is greater potential for growth in gas demand from customers located outside of the South West interconnected system (SWIS) than in the SWIS.
- Exploration in WA’s gas basins is at its lowest level since 1990. If exploration remains low, new gas projects may not be developed and existing domestic gas production facilities may shut down due to lack of gas feedstock. At the current production rates of domestic gas and LNG, proved and probable (2P) reserves can last until 2035, but a large proportion of these reserves are held by LNG export companies and joint ventures.
- The reduction of 380 MW of Synergy’s electricity generation capacity could affect gas demand from SWIS gas powered generators (GPG). In the absence of any public announcements around which specific generators will retire, any changes in GPG as a result of emissions policy have not been accounted for in the gas demand forecastss in this report.