Gas in Queensland

Gas is a vital energy source for Queensland's strong industrial and manufacturing sectors and will play a significant role in the State's continued economic and regional development. It will also be increasingly used in electricity generation and for residential use.

The Queensland Government is committed to further developing the State's gas industry, ensuring a diverse source for its energy needs and reducing greenhouse gas emissions.

Initiatives such as the Queensland Gas Scheme are boosting the Queensland gas market and the accompanying development and expansion of infrastructure will potentially allow more Queenslanders greater access to a choice in how they source their power.

What is gas?

The term 'gas' usually encompasses two types of related, naturally occurring gases (natural gas and coal seam gas), both of which contain mainly methane. Both of these gases are found in Queensland in commercial quantities. It also includes liquefied petroleum gas (LPG), one of the petroleum products from the oil refining process. Queensland does not have significant oil reserves.

Queensland's gas reserves

Demand for natural gas in Queensland is met through conventional gas and coal seam gas reserves. Both are natural gas - but there are significant differences in the way the gas is extracted and the location of the reserves in Queensland. Conventional gas is drawn from fields covering the Cooper and Eromanga basins in the south and south-west of Queensland with most production being completed at Ballera and Roma. Coal seam gas is drawn from the Bowen and Surat basins. Queensland has over 5000 petajoules of proved and probable conventional and coal seam gas reserves. Around three quarters of gas produced in Queensland is from coal seam gas reserves.

Australian Energy Market Operator

The Queensland Government, through the Ministerial Council on Energy, recently established the new Australian Energy Market Operator (AEMO), through amendments to the National Electricity Law and National Gas Law.

From 1 July 2009, AEMO has assumed the functions of existing gas and electricity market operators, including the Victorian Energy Networks Corporation and its role as Queensland's Gas Retail Market Operator (GRMO). 

The benefits of a single market operator include ongoing improvements to efficiency and competitiveness in gas and electricity markets, and ensuring Australians retain secure, well-managed energy markets and the lowest possible prices.

The National Gas Law can be found on the South Australian Legislation website.

The amended National Gas Rules can be found on the Australian Energy Market Commission website at www.aemc.gov.au, while the new Queensland Retail Procedures can be found on the AEMO website.

Gas full retail competition

From 1 July 2007 Queensland's domestic and business gas markets were opened to full retail competition (FRC). For the first time, approximately 135,000 Queensland gas customers are now able to choose their gas retailer.

The Victorian Energy Networks Corporation (VENCorp) was appointed as Queensland's Gas Retail Market Operator on 1 July 2007.  AEMO replaced VENcorp on 1 July 2009.  AEMO acts as the facilitator of FRC in Queensland's retail gas market, ensuring the development, maintenance and administration of retail rules and providing services including operation of centralised IT systems.

The Queensland Gas Scheme

Under the Queensland Gas Scheme electricity retailers are required to source 13 percent of the electricity they sell in Queensland from gas-fired generation. The target will increase to 15 per cent by 2010. The Scheme is designed to diversify the State's energy mix towards the greater use of gas, assist in encouraging the development of new gas sources and infrastructure in Queensland and reduce greenhouse gas emissions from the Queensland electricity sector.

Already Queensland is reaping the rewards of gas development following completion of a pipeline to take gas from Moranbah to fuel the Townsville Power Station. The power station is North Queensland's first major, base load gas-fired power station.

Leading the way in coal seam gas technology

Coal seam gas was once considered nothing more than a waste product of coal mining. Now, Queensland is leading the world in the technology that makes extraction of coal seam gas commercially viable.

The Queensland Gas Scheme has provided the ideal climate for the developing coal seam gas industry.

In 2000, when the Scheme was announced, coal seam gas was supplying around 2 Petajoules of gas a year - less than 5 percent of Queensland's gas requirements. By 2008 coal seam gas was supplying around 75 percent of Queensland's gas.

That will mean a broader base of energy sources for the State, cleaner energy, reliability of supply, well-priced gas and real choice when consumers consider their energy supply options.

Liquefied natural gas - a potential new industry for Queensland

Now that the commercial value of Queensland's coal seam gas resources has been demonstrated, there has been a surge in interest from companies seeking to use the gas as an input for a new liquefied natural gas (LNG) export industry based in Queensland.

There is strong potential for such an industry as global demand for LNG grows. There are a number of proposals to build LNG production and export facilities at Gladstone.

While an LNG export industry would provide many benefits to Queensland, the Queensland Government is also examining all the potential issues that may arise as a result, including the impacts on other users of gas such as householders, small business, mining and agricultural industries and electricity generators.