Gas supply chain
Natural gas in Australia is currently extracted as either:
- conventional gas
- unconventional gas (such as coal seam gas or shale gas)
Gas producers extract the gas from wells and process it to prepare it for transmission and sale in domestic and overseas markets.
Gas producers sell wholesale gas to electricity generators, other large gas users and energy retailers, who sell it to business and household consumers.
Conventional natural gas
Conventional natural gas:
- can be found deep in the ground trapped in underground rock formations called reservoirs
- can be found onshore or offshore
- is drilled from the reserve using similar technology to oil drilling
- is then refined to remove certain elements prior to shipping.
- is found in shale formations that are often deep under the surface
- extraction has been more feasible with modern technology, including horizontal drilling
- is found in coal reserves closer to the surface
- is held by water pressure in the coal reserves
- extraction is a relatively new approach
In 2016 eastern Australia produced 1660 petajoules of gas. Fifty-eight per cent of this was exported from the Queensland LNG facilities. Similarly, most gas produced in Western Australia and the Northern Territory is also exported as LNG.
Conventional natural gas in eastern Australia is currently produced in a number of fields in the Gippsland, Otway, Cooper, Bass and Surat-Bowen basins. Conventional natural gas is also produced from the Carnarvon and Perth basins in Western Australia and the Bonaparte basin in the Northern Territory.
Coal seam gas is produced in a number of fields in the Surat-Bowen and Sydney basins. This gas supplies domestic consumption as well as LNG exports.
Gas transmission pipelines
The gas produced for domestic consumption is transported (or ‘shipped’) by high pressure transmission pipelines from the production facility to the entry point of the distribution network (known as the city gate) or to large users that are connected to the transmission pipeline.
Transmission pipelines use very high pressure pipelines, compressor stations, storage facilities and other elements to transport gas.
Storage facilities include any element in the system that has the capability of storing gas, such as:
- transmission pipelines themselves through linepack
- Two LNG storage tanks on the east coast (Newcastle and Dandenong)
- Six underground storage facilities (depleted gas fields)
Gas storage facilities can inject gas into the transmission system at short notice to manage peak demand or emergencies. They are typically owned by energy retailers.
A map of Australian transmission and distribution pipeline can be found on the gas scheme register page.
Gas distribution pipelines
Gas distribution pipelines transport natural gas from transmission pipelines to end users. They typically consist of a backbone of high and medium pressure pipelines running between the ‘city gate’ (the point of connection to the transmission pipeline) and major demand centres. This pipeline system feeds low pressure pipelines, which deliver the gas to businesses and homes.
Natural gas distribution pipelines supply gas to 4.3 million households and 130,000 commercial and industry customers . There are over 88,000 km of low pressure distribution networks
Energy retailers are the distribution pipelines’ main customers. They buy natural gas in large volumes and on-sell it to consumers.