Gas in Victoria
Natural gas has been an important part of Victoria’s energy mix for many years. Victoria has the highest national level of gas reticulation and a significantly higher level of residential gas usage than any other Australian state or territory.
It heats homes and businesses, fuels gas-powered electricity generators and is a key input for manufacturing. Natural gas and ethane are also essential feedstock for producing chemicals, explosives, fertilisers, plastics and pharmaceuticals.
Looking to the future
As part of the Victorian Government Climate Change Strategy, our state is on track to reach net zero emissions by 2050. The Government has set interim targets to reduce emissions by 28-33 per cent by 2025 and 45-50 per cent by 2030, under the Climate Change Act 2017. Achieving our interim targets and ultimately reaching net-zero emissions will require us to cut emissions across the entire economy – including from the use of natural gas. The Victorian Government is developing the Gas Substitution Roadmap to help us achieve these interim targets and navigate the path to net zero emissions.
The roadmap will detail the transition pathways and identify policy mechanisms to achieve Victoria’s emissions reduction targets through reduced fugitive emissions, more efficient use of gas, electrification and increased use of sustainable gas alternatives such as hydrogen and biogas.
Throughout the transition to fully sustainable alternative energy sources, the government's priorities are maintaining energy affordability, security, reliability and safety for consumers and creating clean energy jobs and new skills over the coming decades.
In 2021 the Government released a consultation paper, which discussed potential transition pathways to achieve net zero emissions and identified key issues to be considered throughout this transition. Views of the Victorian community and industry were sought to help us better understand the opportunities and challenges that this transition will bring. You can access the consultation paper, and submissions received in response, on the Engage Victoria website: engage.vic.gov.au/help-us-build-victorias-gas-substitution-roadmap
How the Victorian gas system currently works
Victoria’s gas system consists primarily of gas fields and processing facilities that extract and process gas, high pressure pipelines that transport this gas around the state, and low-pressure distribution pipelines that deliver gas to customers. Most gas is produced from the offshore Gippsland and Otway basins, and the largest processing facility is at Longford in the east of the state. The largest storage facility is an underground facility at Iona in the State’s southwest.
This system is operated through a commercial market, which allows gas to be traded between producers and users, and balances supply and demand. A range of national and state regulatory bodies ensure that this system operates safely and efficiently.
Each year, the Australian Energy Market Operator (AEMO) issues the Gas Statement of Opportunities and Victorian Gas Planning Report. AEMO’s forecast in the Victorian Gas Planning Report 2021 indicates sufficient gas supply to meet demand over the five-year outlook period.
To find out more, visit aemo.com.au/energy-systems/gas/gas-forecasting-and-planning
Page last updated: 12/01/22