Plans to develop a major new source of gas that could help avert looming supply shortfalls are set to proceed after Senex Energy’s long-delayed $1 billion Atlas project in Queensland’s Surat Basin gained federal environmental approval.
The Australian Energy Market Operator last week dialled up its warnings of a gas crunch, issuing a “threat notice” about the potential for gas to run short in Victoria, NSW, South Australia, Tasmania and the ACT until the end of September.
The Ocean Onyx drill rig, which is being used to produce oil and gas in the Otway Basin, off Victoria’s coast.
The warning comes amid the rapid depletion of gas supplies from the 50-year-old Gippsland Basin gas fields in Bass Strait, which have traditionally supplied the bulk of eastern Australia’s domestic gas demand, without enough new drilling projects coming online to replace them.
Senex Energy, which is owned by Korean steel group Posco and mining billionaire Gina Rinehart’s Hancock Energy, tonight said it had received federal approval permitting it to proceed with its $1 billion expansion of its Atlas and Roma gas developments in Queensland that could deliver “sorely needed” new domestic gas.
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Senex chief executive Ian Davies said the approval cleared the last major hurdle standing in the way of the project, which faced delays of more than 18 months amid regulatory uncertainty due to the government intervention in the market to tame soaring gas prices following Russia’s invasion of Ukraine in 2022.
“We now have the necessary investment confidence and regulatory approvals to proceed with our expansion and deliver sorely needed natural gas supply to the east coast market,” Davies said.
“This announcement is especially timely given the current pressures that the east coast energy system is experiencing, particularly in southern states.”
Government policies banning gas hook-ups in new residential buildings and encouraging people to switch gas appliances to electric alternatives are successfully driving down long-term gas demand forecasts for the fossil fuel, which is a significant contributor of greenhouse gas emissions. But the shift is not happening fast enough to avert the threat of shortfalls for a fuel that remains widely used in heating, cooking, power and manufacturing, authorities warn.
Senex chief executive Ian Davies says the gas in the Atlas project is “sorely needed”.Credit: Jeremy Piper
Major Australian gas users including manufacturers CSR, BlueScope Steel and Orora, which rely on gas as a feedstock in their factories’ processes, as well as energy retailers including AGL and EnergyAustralia, have struck deals to buy gas from Senex’s Atlas project.
