The Federal Government has announced that two new enforceable commitments have been secured to supply more gas to the east domestic gas market, with other commitments in the works.
The new commitments total up to 300PJ of gas to 2030, and close to 140 PJ to the end of 2027 from APLNG and Senex.
300PJ is equivalent to around two years of east coast industrial usage.
These are the first of several applications expected to be made under the new Code. The Federal Government has said that it will continue to work closely with industry and users to shore up energy security.
The energy market operator and ACCC have warned that Australia will not have enough gas to power factories, generate power, cook and heat homes in 2027 and that these supply agreements help guard against that outcome and are crucial for avoiding a serious problem.
The Federal Government has said that this supply is critical for households, industry and gas power generation as the Bass Strait fields deplete.
The Energy Users Association of Australia (EUAA) has said that the Code of Conduct is a vital protection for Australian households and business and should have bipartisan support.
The EUAA has implored senators to vote in favour of the gas code to help protect millions of Australian families and businesses and ensure they get a fair deal from the gas industry.
APLNG and Senex have been granted Ministerial Exemptions from the pricing provisions of the Gas Market Code of Conduct, giving the companies regulatory certainty over their investment and development plans – and the additional supply helping to keep a lid on prices.
Federal Minister for Climate Change and Energy, Chris Bowen, said that the outcome was a win for Australian energy users.
“The new commitments will provide more affordable gas to the Australian market in the short to medium term and will provide the energy security that Australia needs as it makes its transition to net zero emissions,” Mr Bowen.
Federal Minister for Resources and Northern Australia, Madeleine King, said that the supply commitments are a good example of how industry and government can work together to solve issues.
“The role of gas is changing in the Australian economy, and as it changes, gas will continue to play an important role in the reliability and stability of the energy system,” Ms King said.
“The flexibility of gas as a firming fuel and as essential manufacturing and minerals processing input will be required as the transition accelerates domestically and in our region.
“These commitments also mean that gas producers can get on with the job of safely and responsibly delivering gas to users, while reassuring project investors and our export partners that Australia remains a stable and reliable supplier of energy.”
The ACCC will publish information on the specific commitments, which are legally enforceable. Companies will regularly report compliance to the ACCC for inclusion in the ACCC’s quarterly gas outlook report, and non-compliance with exemption conditions attracts the highest penalties available under the Code.
The Mandatory Gas Market Code of Conduct came into force in July 2023 and will be reviewed by 2025.