Energy giant AGL is warning that NSW could face a gas shortage by 2017 if coal seam gas projects are prevented from going ahead.
Energy giant AGL says controversial coal seam gas projects need to go ahead to alleviate a likely gas shortage in NSW within three years.
Chairman Jerry Maycock said NSW had long relied on gas from interstate to meet demand, but the construction of large-scale LNG projects in Queensland would soon see much of that gas exported to Asian buyers at significantly higher prices.
“This places NSW at great risk of being materially short of gas from 2017,” he told shareholders at the company’s annual general meeting on Thursday.
Only five per cent of NSW’s gas needs were currently being met with local supply, Mr Maycock said.
That could rise to around 20 per cent if AGL’s controversial Gloucester project in northern NSW goes ahead.
“Even with gas from Gloucester, NSW will continue to face materially higher gas prices unless additional projects also come on stream,” he said.
AGL continues to fend off criticism over the gas project, with concerned residents and protesters using the AGM to raise fears the company’s activity in the region could contaminate the water supply and damage agricultural land.
Among a group of around 100 protesters outside the meeting was actor Michael Caton, star of hit film The Castle and 1970s TV show The Sullivans.
He said gas extraction should only take place away from prime agricultural land.
“You are really risking long-term damage to the environment, to rich agricultural land,” he told AAP.
“It’s uncanny how they hone in on the really good agricultural land, where there are places you could extract gas from where the water table isn’t as valuable.”
AGL chief executive Michael Fraser said the protests had not affected activity at the Gloucester project.
“The current protests are not making any difference, we’ve been on site since August proceeding with our works,” he told AAP.
Meanwhile, AGL has flagged a rise in underlying profit this financial year, as it banks on a “more normal”, colder winter in 2015.
The company expects to achieve an underlying net profit of between $575 million and $635 million in 2014/15, up from $562 million last financial year.
However its bottom line will include a $156 million charge related to its recent purchase of two power stations from the NSW government.
AGL shares fell 12 cents to $13.59.