Accelerating priority natural gas infrastructure projects
The Morrison Government is accelerating priority gas infrastructure projects that will protect Australia from potential energy shortages, keep pressure on prices and create jobs in regional Australia as part of our plan for a stronger future.
Under the Future Gas Infrastructure Investment Framework Expression of Interest process launched last year, an additional $50.3 million will be invested in seven priority projects, as well as key carbon capture and storage infrastructure.
Minister for Industry, Energy and Emissions Reduction Angus Taylor said the government was working with industry to accelerate priority projects to ensure Australia does not experience the devastating impacts of a gas supply shortfall, as seen recently in Europe.
He said Russian gas accounted for around 32 per cent of total European and UK gas consumption, but Russia’s invasion of Ukraine has created an unacceptable risk to global gas security.
The International Energy Agency (IEA) has noted that the significant price increases in Europe have been driven in part by a lack of investment in supply and infrastructure.
“The ACCC and AEMO have made multiple warnings of the forecast gas supply shortfall in the east coast market as early as this decade. This, along with the energy crisis in Europe, should act as a warning of what could happen in Australia if there is not enough investment in the gas sector at home,” Minister Taylor said.
“Gas prices in the United Kingdom and Europe have increased by more than 300 per cent over the past 12 months. Our prices have remained around 75 to 80 per cent below these international highs. We must continue to invest in gas to keep our price internationally competitive to support local business.
“Our National Gas Infrastructure Plan, released last November, highlighted the critical need for more gas storage to provide greater supply flexibility during winter peaks, along with the need to get more northern gas to the south.
“That’s why we are investing in seven priority projects as part of our gas-fired recovery, to make sure Australia has adequate supply and storage to avoid expected shortfalls in production in southern Australia that could emerge by 2024.
“Our investment will help keep the lights on and homes heated in southern Australia, and support our industries and businesses to keep operating.”
The seven infrastructure projects that support NGIP priority actions selected for early works support are:
- In Victoria:
o Southwest pipeline expansion project (APA Group)
o Heytesbury Underground Gas Storage project (Lochard Energy)
- In Queensland:
o Project Range project (APA Group)
o Surat Hub project (APA Group)
o Gas Infrastructure Hub project in the Bowen Basin (Transition Energy Corporation Pty Ltd)
- Along the East Coast:
o East Coast Gas Grid Expansion Stage 2 (APA Group)
- In the Northern Territory:
o A feasibility study into the most efficient infrastructure to deliver natural gas from the Beetaloo sub-basin to the east coast gas market.
The investment also includes funding for feasibility studies and options for CO2-carrying pipelines from major gas and industrial hubs to prospective sites for carbon capture and storage. These locations include:
- Upper Spencer Gulf region to the Cooper Basin
- Gladstone to the Surat Basin
- Gladstone to the Cooper Basin; and
- Options for CO2 pipes in the Beetaloo Basin.
The Government will now engage with the project proponents to finalise grant agreements.
Carbon capture and storage (CCS) is one of the priority technologies under the Low Emissions Technology Statement 2021. Supporting the development of CO2 infrastructure alongside major gas pipelines will enable low emissions natural gas production as well as open up opportunities for low emissions manufacturing and low-cost clean hydrogen production from natural gas.
“The Government has a clear stance on both natural gas and CCS – we will strongly back these sectors which are critical to both affordable and reliable energy for all Australians, as well as emissions reduction," Minister Taylor said.
“This is in complete contrast to the Labor Party which is willing to risk Australia’s energy security and investment in regional Australia to appease gas activists.”
The IEA, the Biden Administration, and the Intergovernmental Panel on Climate Change have all recognised CCUS as an essential technology to achieve the goals of the Paris Agreement.
Funding details for the gas package will be included in the 2022-23 Budget.
Minister Taylor's office 02 6277 7120