The Australian government has secured two new enforceable commitments with gas giants Esso and Woodside as part of the new Gas Market Code laws, delivering a boost to the country’s manufacturing capabilities.
The new deals bolster the federal government’s efforts to deliver a more reliable energy system. They are also critical for Australian manufacturing and boosting reliability as households and businesses ramp up low-cost renewables.
Over 260 PJ of gas will be made available between now and 2033 through the new supply commitments, which is enough to power east-coast gas-fired power stations for around two and a half years.
The deals will also directly feed into southern demand centres previously identified as being at particular risk of seasonal shortfalls and ensure there is sufficient supply to maintain a downward pressure on gas prices.
Gas is critical to supporting the reliability and affordability of the increasingly renewable grid by providing peaking and farming.
The latest deal with Esso and Woodside follows the commitments made by Senex and APLNG, which was announced in November 2023, bringing the total volume of gas secured through the Gas Market Code commitments to 564 PJs.
“We know that gas is critical to supporting a lower-cost, more renewable grid as aging coal exits, and to support Australian manufacturing – which is why we’ve delivered this code to shore up energy reliability and affordability after a decade of chaos,” said Minister for Climate Change and Energy Chris Bowen.
Minister for Resources and Minister for Northern Australia Madeleine King said the agreement highlights the continued importance of the Bass Strait in supplying and supporting the East Coast energy network.
“Gas is our insurance policy for the energy grid as we move to cleaner and greener renewables. Gas is also indispensable in the processing of critical minerals and technologies such as wind turbines and solar panels,” she added.