Gas Import Jetty & Pipeline Discussion

Risking creating a stranded asset?

Risking creating a stranded asset?

Risking creating a stranded asset?


Supposing that an Australian government gets serious about protecting us from climate change, or a court rules that your facility increases the likelihood of greenhouse emissions contributing to unacceptable climate change, would your import terminal, built to promote increased burning of gas in Victoria, become a stranded asset? In economic terms to be both importing and exporting gas suggests at least one of those activities is logically redundant, doesn't it?


AGL Employee

Hi Curious,


We know that there is a great deal of concern about the impact of greenhouse gas on the future of our environment.


AGL is Australia’s largest corporate emitter of greenhouse gas emissions. At the same time, AGL has Australia’s largest privately-owned and operated portfolio of large-scale renewable energy assets.


Over 80 per cent of electricity produced in Australia is sourced from the combustion of fossil fuels. To achieve the Paris Agreements’ ‘two degrees’ outcome (or the more ideal and concerted effort of 1.5 degrees above preindustrial levels), AGL need to decarbonise our fleet and build on our existing renewable technology. Unfortunately, given the sheer scale of replacing the existing generation fleet with low-emissions substitute technology such as solar and windfarms this process may take several decades.


Renewables are the future of energy and AGL is committed to getting out of coal from 2022. As we move out of coal, gas will be used to maintain the lowest cost for energy possible and ensure efficient, reliable power generation. A technological issue we have with renewables is the difficulty of energy storage, as we develop technology to solve this (which we expect to soon), we do need to ensure supply to our customers. When intermittent renewable electricity generation sources are unavailable, flexible gas-fired ‘peaking’ power stations can be brought online.  


Replacing coal with gas helps to reduce our greenhouse gas emissions. As an example, mix of renewable and gas technologies can replace AGL’s Liddell coal plant when it closes, reducing greenhouse gas emissions by 7.5 million tonnes of CO2 equivalent per annum.


Gas is being exported from Queensland and Western Australia and we do not have access to this gas.  Pipeline constraints prevent the gas being delivered from Queensland in amounts need to meet high winter demand and there is no pipeline from WA.  We have a regional demand imbalance not an overall gas shortage in Australia because the southern states relied on plentiful cheap gas from legacy gas fields in Bass Strait that are now in decline.  We need to import gas to meet the needs of the south eastern states.


The latest AEMO 2019 Gas Statement of Opportunities (GSOO), released on 28 March 2019, said the east coast gas market faces tight supply from 2021 and shortfalls from winter 2024 if more is not done to replace rapidly declining output from Bass Strait and supplies from Queensland limited by pipeline capacity.


Why does AGL not have access to the gas from Queensland and W.A.? Yes there are no pipelines but why does AGL want to import from overseas instead of from QLD and WA? 

AGL Employee

Hi @sunflower,


We agree it would make more sense to source gas locally and have not ruled out doing so.


We understand community concerns around the source of gas. We have to balance this with our commercial obligation to source the most cost-effective gas available to us in the market. These factors will all need to be evaluated when the gas is procured.