Plans for Senex Energy’s $1 billion Atlas project in Queensland’s Surat Basin have gained federal environmental approval, paving the way for the development of a major new source of gas that could help address potential supply shortfalls. The Australian Energy Market Operator has issued warnings of a gas crunch, particularly in Victoria, New South Wales, South Australia, Tasmania, and the ACT until the end of September due to the rapid depletion of gas supplies from the aging Gippsland Basin gas fields. The approval for the Atlas project comes after delays of over 18 months caused by regulatory uncertainty following government intervention to control soaring gas prices.
Senex Energy, owned by Korean steel group Posco and mining billionaire Gina Rinehart’s Hancock Energy, has received the necessary investment confidence and regulatory approvals to proceed with the expansion of its Atlas and Roma gas developments in Queensland. This project is seen as crucial for delivering new domestic gas supply to the east coast market, especially given the current pressures on the energy system, particularly in the southern states. The approval clears the last major hurdle standing in the way of the project, which aims to address the looming threat of gas shortfalls and provide much-needed natural gas supply to the market.
While government policies aimed at reducing long-term gas demand forecasts by banning gas hook-ups in new residential buildings and encouraging a shift to electric alternatives are successful in decreasing gas consumption, authorities warn that the transition is not happening quickly enough to prevent supply shortfalls. Gas remains widely used in heating, cooking, power generation, and manufacturing, making it a significant contributor to greenhouse gas emissions. Major Australian gas users, including manufacturers CSR, BlueScope Steel, and Orora, as well as energy retailers AGL and EnergyAustralia, have all signed agreements to buy gas from Senex’s Atlas project, underscoring the importance of developing new gas sources to meet ongoing demand.
The warning from the Australian Energy Market Operator about potential gas shortages in several states highlights the urgency of developing new gas supplies like the Atlas project to address the looming supply shortfalls. With traditional gas fields in Australia such as the Gippsland Basin gas fields in Bass Strait running out of supplies, the need for new drilling projects to come online to replace them is becoming critical. The approval for the Atlas project is seen as a significant step in addressing this issue and providing much-needed supply to the east coast market, particularly in the face of current pressures on the energy system.
Senex CEO Ian Davies emphasized the importance of the Atlas project in meeting the demand for natural gas in the east coast market, describing it as “sorely needed.” The project’s approval comes at a crucial time when the energy system is experiencing strains, particularly in southern states, and the threat of gas shortages looms large. As government policies drive the transition away from gas towards electric alternatives, the need for new gas supplies remains urgent to ensure a reliable and stable energy supply. The agreements signed by major Australian gas users and energy retailers to buy gas from the Atlas project further highlight the project’s significance in meeting the demand for natural gas in the market.
In conclusion, the approval of Senex Energy’s Atlas project marks a significant milestone in addressing the potential gas shortages facing the east coast market and provides a much-needed new source of gas to avert looming supply shortfalls. The project’s approval comes after delays caused by regulatory uncertainty and government intervention to control soaring gas prices. With traditional gas fields depleting rapidly, the development of new gas sources like the Atlas project is essential to ensure a stable and reliable energy supply. The agreements signed by major Australian gas users and energy retailers to purchase gas from the project underscore its critical role in meeting ongoing demand for natural gas.
