Australia to finalize new offshore permits for gas supply, CCS exploration

Australia is set to finalize new offshore exploration permits for gas supply and carbon capture and storage exploration, a move that could boost its economy and energy transition goals, according to the Ministers for the Department of Industry, Science and Resources.

Minister for Resources and Northern Australia Madeleine King will finalize permits for Esso and Beach Energy in the Otway and Sorrell basins, with any discovered gas to support the domestic east coast market, the department said in a statement July 23.

Exploration permits will also be finalized for Chevron, INPEX, Melbana and Woodside Energy on Australia's west coast, supporting energy security in that region. In addition, 10 permits will be finalized for carbon capture and storage exploration.

"As ageing coal generation comes offline in coming years, gas will continue to be needed to firm renewable energy generation and as a backup during peak energy use periods," King said.

Since the government has come to office, there has been a 25% increase in renewable energy generation in the National Electricity Market, and this has driven both its total emissions and emissions intensity to record lows.

The finalization of offshore exploration permits does not automatically allow new offshore gas production to occur. Separate and extensive safety and environmental approvals will be required through Australia's independent National Offshore Petroleum Safety and Environmental Management Authority, and more community consultation will also be needed before any offshore exploration work can commence, the statement said.

Companies will be required to license or reprocess existing seismic data as no new seismic surveying will be permitted to occur as part of the approved work program for each permit.

The move to finalize new permits follows a recent gas inquiry interim report by the Australian Competition and Consumer Commission that said the domestic east coast market may experience gas supply shortfalls as early as 2027.

Supply challenges could persist well beyond that timeline unless new sources of gas supply are developed to meet energy needs, industry sources have said. The country's Future Gas Strategy unveiled earlier in 2024 has been seen as a positive step toward meeting Australia's energy security needs.

The Australian Energy Producers welcomed the announcement of the acreage releases to boost long-term gas supply in the country and the Asia-Pacific region.

"It has been two years since the last petroleum acreage release in what used to be an annual process. Australia has abundant gas resources but needs the political will to restore investment confidence and ensure timely approvals for much-needed new gas supply," Australian Energy Producers Chief Executive Samantha McCulloch said.

"Today's announcement is an important step in the right direction, however it is imperative the government open the next round of petroleum acreage permits as soon as possible to find and develop the next generation of gas supply," McCulloch said.

The award of the CCS acreages was desirable for the decarbonization of Australia's economy, she said.