Australia signs deal with Shell unit to supply 40 Pj gas to domestic market

The Australian government has secured 40 Pj of natural gas, or approximately 840,000 mt LNG, under a deal with Walloons, part of Shell, for gas-fired power generation on the East Coast between now and 2027, the Minister for Resources and the Minister for Climate Change and Energy said in a joint statement June 13.

The gas was secured under the government's Gas Code of Conduct and adds to supply commitments made by energy companies Esso, Woodside, Senex and APLNG, the statement said.

The latest deal brings the total volume of enforceable gas supply commitments secured for households and businesses under the code to more than 600 Pj, or about 11.54 million mt LNG, it said.

The Australian Energy Market Operator said in March the government's policy was improving natural gas supply, particularly in key Southern demand areas, and confirmed that the supply commitments had pushed back projected shortfalls by two years, to 2028.

Walloons is a part of Shell's Queensland Gas Co. or QGC business and is responsible for the marketing and trading of natural gas in the Australian gas market on behalf of the Queensland Curtis LNG (QCLNG) joint venture, the statement said.

Shell's QGC business produces natural gas from coal seams in the Surat Basin and supplied 15% of Australia's East Coast gas market in 2023, according to its website. Shell is the operator in the QGC venture and other partners in the LNG plant on Curtis Island are CNOOC (50% equity in Train 1) and Tokyo Gas (2.5% equity in Train 2).

Australia's Gas Code of Conduct is a policy framework designed to ensure natural gas supply for the domestic market at reasonable prices to ensure energy security.