New South Wales could be short of gas seven months of the year by 2018 without new local sources of supply, according to a key scenario in a new independent report by the Australian Energy Market Operator (AEMO).

AGL Energy Limited (AGL) welcomes the NSW Government’s stance today on the need to utilise available natural gas reserves from coal seams to avoid this supply shortage.

A shortfall would have a significant impact on the energy needs of the state’s manufacturing industries, effecting their competitiveness and potentially jobs.

With approximately 95 percent of NSW’s gas supply coming from outside the state, AGL’s Managing Director, Michael Fraser, said it was time to move forward on coal seam gas projects to bolster much-needed future supplies.

"NSW is almost entirely reliant on gas from other states. This report paints a very real picture of the potential shortages facing NSW unless we take action to source gas locally," Mr Fraser said.

"We have a solution right on our doorstep. AGL’s Gloucester Gas Project has the potential to supply more than 15 percent of the state’s gas needs by 2017-18.

"I welcome Minister Hartcher’s comments today and the projections in the AEMO report which are consistent with what we have been saying for some time now.

"While we understand the concerns some members of the community have about coal seam gas, the fact is we need new sources of supply.  We know that we can develop these resources safely and without risk to health and the environment as we have been doing successfully in Camden for 13 years.

"Coal seam gas is natural gas and we use it every day. Coal seam gas already supplies 35 percent of eastern Australia’s gas needs."

About AGL

AGL is one of Australia's leading integrated renewable energy companies and is taking action toward creating a sustainable energy future for our investors, communities and customers. Drawing on over 175 years of experience, AGL operates retail and merchant energy businesses, power generation assets and an upstream gas portfolio. AGL has one of Australia's largest retail energy and dual fuel customer bases. AGL has a diverse power generation portfolio including base, peaking and intermediate generation plants, spread across traditional thermal generation as well as renewable sources including hydro, wind, landfill gas and biomass. AGL is Australia's largest private owner and operator of renewable energy assets and is looking to further expand this position by exploring a suite of low emission and renewable energy generation development opportunities.