Other short-term prospects identified that the major known gas fields of southeast Australia are significantly depleted, two potential projects for the short to medium term have limitations connected to infrastructure and commerciality, and that the Greater Dory prospect on the edge of the Gippsland Basin has potential as an exploration prospect, but would take 7 to 10 years to bring to market if successful.
The study found that short-term opportunities for increased gas supply from offshore southeast Australia are limited, with titleholder forecasts showing that supply levels could continue at the current level over the next 1 to 5 years, before declining over the 5 to 10 year period.
A number of infrastructure limitations were identified, including:
- The Gippsland Basin is the dominant source of offshore gas supply to south east Australia; approximately 50 per cent of the gas required to meet domestic demand comes from the Longford Gas Plant with the other five gas plants in Victoria providing approximately 10 per cent of domestic demand.
- The Longford Gas Plant only supplies the market at levels approaching its full capacity during periods of high seasonal demand.
- The supply from the Longford Gas Plant may also be constrained by the capacity within the recently completed gas conditioning plant to process increasingly higher CO2 gas streams.
- Four of the other five gas plants process gas from outside the Gippsland Basin and have spare capacity, but there is no significant gas supply on the horizon which would allow utilisation of this capacity.
- Resources held under petroleum retention lease and petroleum exploration permits are expected to be developed through existing onshore infrastructure – in the Gippsland Basin, timing of this development will depend on capacity becoming available within nearby infrastructure and securing off-take agreements at prices that support the required investment.
The study also showed that structural and strategic barriers to entry and third party access have the potential to impede the development of offshore resources in southeast Australia, with low oil prices and declining gas resource quality also a contributing factor.
“The report confirms what industry has been warning for years: that there is a pressing need to develop new gas supply to meet the energy demands of businesses and homes,” said Australian Petroleum Production and Exploration Association (APPEA) Chief Executive Dr Malcolm Roberts.