Eastern coast gas supply worsening as Qld LNG producers focus on exports, ACCC says

Qld LNG producers are still focused on exports as domestic supplies fall, the ACCC says. Photo: Angad Cheema/ Pixabay

Australia’s east coast gas supplies for 2025 and 2026 is worsening despite a slight fall in prices late last year.

The is the finding of the Australian Competition and Consumer Commission’s (ACCC’s) latest gas inquiry report released today.

You can click here for the report.

“Gas prices eased over the past six months reflecting movements in international prices and an increase in market activity following implementation of the Gas Code,” ACCC Commissioner Anna Brakey says.

“However, prices continue to be higher than pre-2022 levels.

“Concerningly, supply into the domestic market has fallen since that time and gas is increasingly being sold on a short-term basis, posing challenges for gas users who need longer-term certainty for their businesses,” she points out.

REPORT’S FINDINGS

- Shortages may start in October and endure all next year
  if Queensland LNG producers export all surplus supply.
- Southern states are becoming increasingly reliant on
  Queensland gas as their own local reserves deplete.
- In the medium term, structural shortfalls on the east
  coast will still start in 2028 unless new gas supplies are tapped.

“Gas policy in recent years has largely been directed towards LNG producers to ensure that their uncontracted gas is available in the short term to avert domestic shortfalls,” Brakey says.

“For long-term energy security and affordability, however, it is critical to address underlying barriers to more efficient investment in domestic supply.”

The report reveals there are enough gas reserves to meet domestic demand for at least 10 years, but these reserves have yet to be tapped due to political, technical and commercial obstacles.

It found that Queensland’s gas reserves and resources, mostly owned by LNG producers, will also be key to meeting the east coast gas demand.

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FALLING SUPPLIES

The report says the short-term supply outlook for the east coast will worsen after some key producers downgraded their production forecasts.

The ACCC says the chances of shortages in 2026 depends on Queensland’s LNG exporters.

Refilling gas storage facilities over summer, when gas demand is lower, will be essential to meeting southern demand next year, particularly for winter, it says.

“The LNG exporters are the only producers with discretion to export their uncontracted gas or supply it into the domestic market so understanding what can affect this ‘swing gas’ and the decisions they could make about gas will be necessary for consideration of options to manage shortfall risks and for effective policy responses,” Brakay says.