Australia is one of the world's biggest gas exporters, but for the first time the country is preparing to do something that was once unthinkable. It's on the cusp of becoming a gas importer. Squadron energy has almost finished building the country's first gas import terminal, which the company says will help avoid a looming supply shortage.
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00:00This new gas import terminal at Port Kembla is nearly finished.
00:06It's sitting alongside a coal export facility and just across the harbour from Blue Scope
00:11Steelmaker.
00:13And it doesn't look like a whole lot from the surface because most of the pipes are
00:16in fact underground, but the centrepiece is in fact a huge ship, a storage and regasification
00:23plant which, if all goes to plan, in 2026 will be sailing through the Port Kembla heads
00:29and then it'll be basically moored up against this new import terminal.
00:33And what this plant can do is receive shipments of liquefied natural gas and it's looking
00:40likely that those shipments will come from overseas and the plant will regasify the gas
00:46and then pump it into the east coast grid.
00:49Now it's being built by Squadron Energy which is owned by billionaire Andrew Forrest.
00:54Now he's known to be quite a clean energy evangelist, so you might take from that, you
01:01know, the fact that he's heavily investing in gas sort of shows the role that the fossil
01:05fuel will be playing in the renewable energy transition.
01:09But as I said, the company is hoping to have this ready and importing gas into the east
01:14coast network in time for 2026 and that's because at the moment we're facing forecasts
01:21of a gas shortfall and in fact in winter, just gone, we came very, very close to suffering
01:29a shortfall.
01:30Here's what Squadron Energy CEO Rob Wills said about the need for this new import terminal.
01:37The short answer is very, very close and the gas storage facilities that are available
01:43currently were drawn down significantly and that supply crisis led to high gas prices
01:48which flowed into our energy electricity market as well with high electricity prices
01:52that could all have been averted had this energy import terminal facility been available
01:57at that time.
01:58And the Australian energy market operator isn't painting a particularly rosy picture
02:03either.
02:04AMO reckons that within just a few short years the forecasts are for demand to outstrip supply
02:10and it's saying that that is a structural shortage we're facing in a couple of years'
02:15time but even in the years leading up, when it gets to peak periods like winter, we are
02:19facing potential shortfalls.
02:20So that is the gap that this Squadron import terminal is seeking to plug.
02:27We've spoken to some energy analysts and they agree that while it does seem kind of crazy
02:33that Australia as a massive exporter is about to be importing gas from overseas, they believe
02:38that it is the only solution currently on the table to actually meeting the shortfall
02:45in demand.
02:46Here's energy analyst Rick Wilkinson.
02:49Quite simply, we've run out of time.
02:51This is the only option, LNG reclassification, that will bring on significant volumes in
02:57the next two years.
02:59All the other options, be they expansion of pipelines, increased storage or explore for
03:04and develop, take three to four years or even longer before you've reached certainty.
03:10And I should note, Ros, that the reason we're facing this gas shortfall is because the kind
03:15of bedrock of supplies in the southeastern part of Australia, the Bass Strait, are running
03:19out faster than expected and new fields simply haven't been developed.