Gippsland gas to the rescue to help keep Australians warm

Gas flexibility fills a gap in the market

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Gippsland gas to the rescue to help keep Australians warm
Late on a chilly Tuesday evening this past autumn, Esso Australia responded quickly to meet the heating demands of Australia’s east coast.

From Adelaide to Sydney, a cold front had caused temperatures to plummet and the demand for gas to rise. 

“Almost all of Esso Australia’s gas is sold to customers under long-term arrangements, which enable us to ensure gas is available where and when our customer need it,” said Stephen Del Monaco, Esso Australia Commercial Business Analytics and Regulatory Supervisor. 

“However, some volumes of gas usually remain available for sale on the spot market,” said Stephen.

During this particular autumn, the gas available on the spot market was important to help ensure total demand could be met. 

“There were a couple of circumstances combining at once across the network that reduced the amount of available gas on the East Coast of Australia,” explains Stephen. 

“The cool temperatures caused higher gas-powered electricity generation, as people tried to keep warm. But there was limited gas availability, because a key underground gas storage facility was undergoing routine maintenance when the cold front unexpectedly hit.” 

Noticing the spike in demand, the Esso Australia team worked late into the evening to ensure spare gas volumes were directed to the customers who needed it, successfully filling a gap left in the market and helping keep Australians warm.

The spot market relates to six facilitated short-term markets across eastern Australia, where participants can buy and sell gas on the day. In some circumstances, Esso Australia offers to sell gas into the spot market when additional Gippsland gas supplies are available. 

“Generally, the Gippsland Basin provides around 40% of eastern Australia’s gas needs, but this can jump to about 60% in winter as people need more warmth.” 

“We usually wouldn’t see this rise in demand in early autumn, so it was important the team acted quickly to keep powering Australia,” said Stephen.

“Ultimately, this highlights the importance of Gippsland gas supplies to Australia’s east coast, especially during colder months.”