Written by Squadron Energy |
There's been a shift in Australia, with more people agreeing that gas will play an important bridging role in the country’s energy transition as coal is taken offline.
But many see this as meaning more pipelines, more drilling, and more long-term fossil fuel infrastructure – that we’ll need gas for decades to come. That’s a mistake.
We agree that Australia doesn’t face a “gas versus no gas” choice. We do, however, face a timing problem. Big new gas fields and pipelines take billions of dollars and years to deliver. Even the Narrabri project, if all approvals were signed off tomorrow, would take at least five years before it was producing any gas at all.
Our system risks shortfalls from 2027 – in fact, right now. We can’t wait until the 2030s for answers.
That’s where LNG regassification terminals come in. Unlike new pipelines that won’t be ready in time and will then lock in 30-40 years of fossil fuel production, Squadron Energy’s regassification terminal at Port Kembla is ready now, and will push back Australia’s East Coast gas shortfall by a decade. It also operates only when needed. It ramps up during tight supply and scales back when renewables and storage are abundant. When a cold snap hits or coal drops out unexpectedly, the terminal is ready to deliver. It removes the need for new gas fields in Australia which will lock in emissions for decades to come.
A bridge to renewables
Flexible gas isn’t the endgame. As we build Australia’s renewable energy future, ultimately, we must phase gas out. And because they are demand-driven, LNG regassification terminals can help do that sooner. Unlike new gas fields that lock in decades of carbon pollution, terminals can be ramped up or down to meet need, giving the system flexibility without long-term fossil fuel commitments.
At the same time, a terminal supports more renewables in the grid, giving system operators confidence to retire coal stations sooner.
Critics call it “ludicrous” to bring gas into a country that produces so much. But consider the numbers. Moving gas from northern basins like Beetaloo to southern users isn’t cheap. Factor in new pipelines, tariffs, and margins, and the delivered cost lands in the mid to high-teens per gigajoule – more than gas delivered via the Port Kembla energy terminal. Importantly, the terminal can also act as a virtual pipeline to ship already-produced domestic gas to southern states, providing flexible supply without waiting for or needing expensive new pipeline infrastructure. Claims that gas from Beetaloo – or anywhere else – could be delivered for less than $10 per gigajoule are, put simply, ludicrous.
Timing is everything
The Australian Energy Market Operator has been clear: peak-day shortages are already here, and the problem starts building from 2027. Seasonal shortages – longer periods where demand outstrips supply – are becoming more likely, and structural shortfalls are forecast to hit before the end of the decade if nothing changes.
Some argue we can wait until more drilling is done and more pipelines are ready. But waiting is the problem. You don’t prepare for a shortfall after it arrives.
The Port Kembla Energy Terminal is built and can be operational by winter 2027. Once it switches on, it will push the supply gap back by at least a decade. No other option can match that scale or timeframe.
Competition matters
Southern buyers are currently dependent on a handful of producers, keeping prices high. A terminal opens the door to multiple domestic and global suppliers, adding competitive tension and bargaining power missing for years. It also provides resilience if a pipeline or plant goes offline.
In other words, it’s not just about molecules – it’s about market power. Regassification terminals increase competition in a market dominated by a handful of producers and infrastructure owners, strengthening system security and offering additional choice for buyers.
Getting on with it
Australia has the resources and innovation to manage the energy transition well. But we have a habit of arguing ourselves into paralysis: imports versus domestic, coal versus renewables, states versus Canberra. Meanwhile, the clock ticks.
This isn’t ideology. It’s about timing, competition, and common sense. LNG regassification terminals don’t hold us back – they give us the insurance policy to finish the job of building Australia’s renewable energy future.
