Offshore gas storage

Victoria relies on underground gas storage to meet high demand throughout winter. A secure and reliable supply of gas is also essential whilst Victoria transitions towards having more renewable energy.

The Australian Energy Market Operator (AEMO) has forecast that there are risks of a gas supply shortfall as early as 2026. Victoria’s Gas Substitution Roadmap identifies challenges facing the gas sector and outlines actions to reduce Victoria’s reliance on fossil gas while maintaining reliability through the transition.

Currently Victoria only has one deep storage facility which is in the southwest of the state. With the amount of gas produced from the Gippsland Basin falling, gas storage will continue to be vital when demand is highest for supplying domestic and industrial users as well as generating electricity. Until we have more batteries and other forms of clean electricity storage (including solar and wind), gas-powered generators will continue to work as a backup to ensure Victorians have a continual power supply.

To ensure an adequate gas supply for Victorians, the Offshore Petroleum and Greenhouse Gas Storage Act 2010 was amended on 6 November 2024 to confirm that petroleum injection and storage is a permitted activity under a petroleum production licence.

The change relates to offshore gas production and storage in Victorian state waters, up to three nautical miles (around 5.5km) from the coast.

Fundamentally, it allows gas to be stored under the sea in the same way it has been stored under the coastal areas of south-west Victoria. This will help alleviate the potential shortfall that has been predicted by AEMO.

The development of unconventional gas, coal seam gas and the use of fracking are all banned in Victoria.

Page last updated: 19 Nov 2024