AGL announced last month it was targeting start-up of a new regasification terminal in South Australia, Victoria or New South Wales by 2021, with severe drilling restrictions in the latter two and SA's Liberal opposition threatening a moratorium of its own.
AGL's other options are continuing to negotiate with Cooper and Gippsland Basin producers for long-term competitive supply, expand domestic supply or look at increased storage options, but has already identified several sites across SA, Victoria and NSW for an import terminal.
Energy News has learned that Wood Mackenzie forecasts a tight gas supply situation on the east coast, with the risk of a shortfall as early as 2019.
"With Bass Strait running hard already, there is little supply flexibility left and it's unclear how the system will cope with unexpected but inevitable supply outages, particularly if combined with a cold winter and limited gas storage in place," Wood Mackenzie Australasia lead analyst Saul Kavonic told Energy News.
"The risks to reliable energy supply will likely only increase going forward unless additional gas supply or alternatives are found."
With the required flexibility in the system still lacking for renewable energy to come to the rescue, Kavonic sees Queensland as the saving grace, saying gas can be diverted from the LNG mega-projects as a more economical solution than LNG imports.
"With time, renewables could take up some of the load; but the need to have flexibility in the system to deal with weather periods when wind or solar performance drops, [which] means gas and coal should retain a key place in the energy supply mix to ensure security of supply," Kavonic said.
"The Queensland LNG projects [delivering gas] to the domestic market may be able alleviate the situation over the medium term, to the extent some LNG projects may have commercial and operational flexibility to divert gas to the domestic market in response to short term supply outages and price signals.
"An LNG import terminal would be an overall economically inefficient avenue to obtain additional supply, given LNG is being exported from the same interconnected market via the Queensland LNG projects.
"There should be a lower cost solution via diversions from the Queensland projects to the domestic market, thereby avoiding additional operational, shipping and gas losses costs."
However, Kavonic also cautioned that realising this solution required attaining alignment between the LNG project joint ventures, pipeline operators and possibly LNG off-takers.
While the LNG operators are getting better at collaboration after refusing to share even a common road between the three Gladstone mega-projects, other factors could come to bear.
"Domestic gas buyers would prefer not to be beholden to the Queensland LNG projects for their supply, for whom the domestic market is not their number one priority," Kavonic said.
"Pursuing an LNG import terminal concept study may make strategic sense for buyers, in order to both mitigate risk in the event another solution cannot be found, but moreover to inform negotiations with the Queensland LNG projects over pricing."
At Santos' investor day earlier this month, executive vice president commercial and business development John Anderson was talking up the Gladstone LNG operator's infrastructure advantage to leverage benefits from looming gas shortages across both sides of Australia.
Anderson said Santos also had a strong uncommitted CSG position in Queensland - including Combabula and Spring Gully - plus some other "early opportunities which are worked up" such as Mahalo and Arcadia West.
"That gas could go to GLNG or to the east coast market instead. It is good to have that optionality," Anderson said.
