THE DEVELOPMENT OF NATURAL GAS IN VICTORIA

Abstract

The development of natural gas in Victoria is mainly that of the Bass Strait gas fields discovered by Esso and BHP, with the former as operator, and of the Gas and Fuel Corporation of Victoria.

Since discovery of natural gas in 1965, the market has grown to the delivery in 1989 of 193 petajoules (PJ), consisting of 157 PJ to the Corporation and 36 PJ for use by the State Electricity Commission for Esso's and BHP's own use.

This development has includeed the consolidation of gas utilities in Victoria into one entity and aggressive competition to replace oil in industry and space heating and electricity in water heating. Price advantages conferred through oil price increases in the late 1970s were countered in the early 1980s by the Government realising the opportunity cost through increased taxation.

Consideration of the likely growth in the Victorian and Australian economies allows some prediction of the future development of natural gas in Victoria to 2010. While the market is expected to increase at a rate of 3.2 per cent per annum in the medium term, this will fall to 2.3 per cent over the long term.

Changes in the numbers of gas appliances in each home and their annual usage, competition from electricity in the hot water market, demand management, losses of some industries, new markets such as NGV and cogeneration and the effects of greenhouse gases will all have their effects.