Please quote Squadron Energy CEO Rob Wheals:
Squadron Energy welcomes today’s update on a national domestic gas reservation scheme, including plans to require the supply, rather than simply the offer, of gas to address forecast shortfalls.
However, the scheme will only improve reliability and affordability if reserved gas can physically reach NSW and Victoria when it is needed.
The scheme must address the winter peak shortfalls facing the southern states, recognise the constraints on storage and north-south pipeline capacity during peak periods, and avoid relying on annualised forecasts that can mask when and where supply shortfalls occur.
We must also ensure we don’t overbuild long-term delivery infrastructure at the expense of consumers. Major new pipelines would require decades of gas production to support their viability, with those costs ultimately passed onto gas buyers through higher transport tariffs.
Instead, existing low-cost flexible infrastructure, including LNG regasification terminals, can physically deliver reserved gas from producing states to southern markets when it is needed, particularly during winter peak periods.
This approach will allow gas to play its role in getting coal out of the system as soon as possible, while avoiding unnecessary long-term infrastructure that risks locking in costs and emissions beyond the period it is needed.
ENDS
Background
Squadron Energy will review the exposure draft legislative package in full and provide a submission as part of ongoing industry consultation.
Squadron’s Port Kembla Energy Terminal is the only LNG regasification terminal in Australia and can support delivery of reserved gas when the scheme comes into effect in 2028.