Offshore gas project near Twelve Apostles gets green light

The state and federal governments have approved a new offshore gas project near the Twelve Apostles, a move Labor insists does not undermine Victoria’s push towards electrification.

Works on Amplitude Energy’s Annie gas field, in the Otway Basin between Port Campbell and Peterborough, will start next year, with gas expected to flow from 2028.

It is estimated of being capable of providing the equivalent of more than a third of Victoria’s annual gas use.

The approval comes as gas supplies from Bass Strait decline and the Australian Energy Market Operator warns of potential shortfalls, now forecast for 2029.

The government says increasing local supply will help ease pressure on prices and maintain reliability for industry.

Speaking at Viva Energy’s Geelong refinery on Thursday, Victorian premier Jacinta Allan said the decision reflected the role gas would continue to play during the state’s energy transition.

“My Labor government has always been clear there is an important role for gas in our energy mix into the future,” she said.

“That’s why we’ve been working hard to, where you can and should, encourage households and businesses to go all-electric.”

Allan said new supply was needed as existing reserves declined.

“It’s why we’ve got billion of dollars worth of exploration works going on right now,” she said. “But we also have to recognise as part of that future, gas is not a replenishing source, we’ve got to bring in more and alternative mixes into our energy supplies.”

Energy and resources minister Lily D’Ambrosio said demand for gas was expected to fall as electrification increased, but some sectors would remain reliant.

“The reality is we cannot have a situation where we just don’t have enough gas in the system for those industries that can’t electrify,” she said.

Annie’s gas supply will come into the domestic south-eastern market, which D’Ambrosio said would be good for Victorian customers.

The approval comes amid ongoing debate about offshore gas drilling and previous community campaigns against seismic blasting proposals along Victoria’s south-west coast.

Earlier today, the Labor federal government announced a domestic gas reservation scheme, which will require exporters to hold back 20 per cent of their product for use in Australia from 1 July 2027.

“Gas market reforms of the Australian government show we’re serious about making sure Australian households, industry and business can continue to access gas at a fair price,” minister for resources and northern Australia, Madeleine King, said.

“[Annie] is expected to deliver additional gas exclusively for domestic use, easing the risk of potential shortfalls for Australia’s east coast.”

There was speculation the new scheme would have a 25 per cent export tax on gas, but this is not a majority recommendation in the select committee’s final report.

The Greens have campaigned heavily for such a tax and have slammed Labor for not introducing one.

“This inquiry shows Labor knows this issue isn’t going away, but still refuses to address the problem that Australians are not getting a fair share of our resources,” select committee chair and Greens Senator Steph Hodgins-May said.

“Labor is desperate to kick the can down the road, but the massive national momentum for a gas tax is clearly making them nervous.”