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New gas supply aims to solve Australia’s energy woes

gas, oil, australia

Australia has inked a new gas supply agreement with Shell, fuelling the domestic market’s needs through to 2028.

Under the agreement, Walloons, part of Shell, will supply 40 petajoules of gas to Australia between now and 2027.

This builds on additional commitments made by Esso, Woodside, Senex and APLNG, bringing the total volume of enforceable gas supply commitments to more than 600 petajoules.

It comes at an important time for Australia as energy prices rise, with households and businesses feeling the pinch. According to the Australian Energy Market Operator, the country was headed for a gas shortfall in 2026. Fortunately, the latest agreement has effectively kicked that can down the road to 2028.

Gas has an important role in ensuring Australia’s increasingly renewable grid is reliable and affordable, by providing gas-powered electricity into the grid at key times to back up the flow of energy from solar and wind.

Using gas as a peaking energy source, means more clean, renewable energy can be brought into the grid, which pushes wholesale electricity prices down for consumers.

“We are driving energy prices down for households and businesses by bringing more clean, cheap renewables into the grid and making sure we have enough future supply of reasonably priced domestic gas to keep our grid stable and reliable,” Minister for Climate Change and Energy Chris Bowen said.

Federal Minister for Resources Madeleine King echoed these comments, saying that the clean energy transition depends on access to gas.

“The shift to clean, renewable energy is well underway but in the meantime we need gas to ensure our energy system remains stable, reliable and affordable,” she said.

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