Narrabri gas project to increase supply: Report
Southern states heading for a gas shortage will be able to shore up supply if the historic multibillion-dollar project at Narrabri goes ahead.
The east coast's gas supply has continued at a steady rate despite the COVID-19 pandemic but is expected to tighten beyond 2021, the latest Australian Competition and Consumer Commission (ACCC) gas inquiry interim report says.
It is expected about 84 petajoules of excess gas next year could be directed into the domestic market, but beyond then the outlook is less certain.
The Santos Narrabri project has been tapped as an obvious solution to a potential shortage, as it is expected to produce 70 petajoules of gas a year - the exact amount the NSW government has vowed to contribute to the domestic market.
Energy and Emissions Reduction Minister Angus Taylor said Australia's competitive advantage had "always" been based on cheap energy, particularly for manufacturers.
"A robust and competitive gas industry will allow both gas producers and users to thrive, with lower prices benefiting all Australians," he said.
"Gas will be central to our ongoing economic recovery."
Mr Taylor said the federal government's energy deal with NSW was a landmark agreement to secure low-cost gas for consumers on the east coast.
"The commonwealth government is a strong supporter of the Narrabri project, but the final decision is for NSW," he said.
Labor resources spokesman Joel Fitzgibbon seized on the ACCC report as proof the Narrabri project would be needed to secure gas supply in the "medium" term.
"We'll have a gas shortfall in the southern states if we don't secure the Narrabri project and build a new pipeline between Queensland and NSW," he said.
"Governments can accelerate both of those projects at little to no cost to the taxpayer."
The ACCC report confirmed gas prices had continued to fall but warned of a widening gap between domestic prices and net LNG offers.
Treasurer Josh Frydenberg said the government was taking the ACCC's concerns seriously.
"The impacts of the COVID-19 pandemic are being felt across the economy, which is why it is important that the government and the ACCC continue to monitor developments in Australia's gas markets to ensure Australia's consumers and businesses benefit from competition," he said.
Originally published as Narrabri gas project to increase supply: Report