South Australia is stepping on the gas with a new $17.5 million government initiative offering matched funding for innovative gas projects that help shore up future supplies.
The 2025 SA Gas Initiative offers grant funding of up to 50 per cent of expenditure on significant projects – up to $2.5 million per eligible project – that help the state meet its mid-to-long-term energy needs.
The Initiative, which follows a successful negotiation with AGL to extend the operation of its Torrens Island Power Station 'B', will help provide additional ongoing supply and capacity in the longer term.
The Initiative will allocate funding from a newly established Gas Security Infrastructure Fund to stimulate investment in a range of projects that increase gas supply, increase gas capacity, or both. These could include projects that:
- enhance geological knowledge of areas of potential gas supplies close to existing infrastructure;
- drive the adoption of new technologies to lift productivity and improve efficiency of gas production;
- gas storage solutions;
- support infrastructure to unlock new gas supply or improve deliverability.
Funding decisions will preference shovel-ready projects considered most likely to deliver new gas supplies by the end of 2028.
Grants of more than $2.5 million may be considered if the total project expenditure is greater than $5 million and applicants can demonstrate the project will have a greater expected outcome in meeting the state's energy needs.
Applicants will be required to clearly state how South Australian gas users will directly benefit from the projects they propose for grant funding, including how projects will help to address potential gas supply shortfalls, how they will support lower energy prices and how they can contribute to greenhouse gas reduction targets.
Application criteria have been designed to ensure the grants only contribute to direct project costs and apply only to costs incurred in the project period.
The call for grant applications is part of a suite of state government initiatives designed to ensure reliable long-term energy supplies. It comes just days after a request to the private sector for tenders to provide long duration dispatchable capacity under the state's Firm Energy Reliability Mechanism (the FERM). In May this year, the Malinauskas Labor Government also opened applications for exploration licences that could yield new or expanded gas discoveries.
The SA Gas Initiative is supported by the Commonwealth Government.
More information about the 2025 SA Gas Initiative is available at www.energymining.sa.gov.au/gas-initiative
As put by Tom Koutsantonis
South Australia was one of the first jurisdictions in the world to identify the opportunity to harness our abundant natural resources to decarbonise the global economy, and we have said consistently that gas is an important firming fuel that will underpin the energy transition.
Gas also remains an important source of long-duration dispatchable capacity, vital to system stability – particularly during periods of peak demand.
Bringing in more gas supplies will give long-term certainty for our energy system, our community and our economy.
This initiative is another step in a comprehensive and cohesive strategy to ensure our state's energy future while cementing our role in the global energy transition.
