The Federal Budget's centrepiece ‘Future Made in Australia' agenda will need to back new gas supply to power the next generation of Australian manufacturing, Australian Energy Producers chief executive Samantha McCulloch said.

McCulloch said the Future Gas Strategy released last week made it clear that natural gas will play a central role in Australia's long-term energy security in a net zero economy to 2050 and beyond, and would need to be backed by actions to deliver new gas supply if Australia is to become a critical minerals and modern manufacturing leader. 

"Australia's oil and gas industry is critical to the nation's economy and energy security and needs to be central to the Government's Future Made in Australia vision," McCulloch said.

"Before we can grow our manufacturing sector, we have to first avoid the looming structural gas shortfalls facing the east and west coast of Australia from 2028. If Australia is to become a critical minerals processing world leader, as the Future Made in Australia envisages, we will need even more gas."

Australian Energy Producers welcomed the Budget's allocation of $32.6 million over four years for regional cooperation on carbon sequestration, including to establish regulatory frameworks and bilateral agreements to support heavy industry to reduce emissions, both in Australia and overseas.

"Carbon capture and storage (CCS) has a critical role to play in the decarbonisation of Australia's economy and in our region," McCulloch said.

McCulloch said the Treasurer's goal of attracting more private capital to Australia should prioritise investment in new gas supply and position Australia for the significant LNG growth on our doorstep.

"Australia's LNG exports were worth a record $92 billion last financial year, and LNG demand in our region is forecast to grow significantly to 2050," McCulloch said.

"Australia has the opportunity to remain a leading producer of LNG to support the energy security and decarbonisation plans of some of our biggest trade partners."