Gas supply in Australia’s eastern states could fall short from July to September amid a decline in production, according to the ACCC.
Projected supply for the period is 493 petajoules in total, while demand is expected to reach 502 petajoules. Minister for Resources Madeleine King said that Australia’s government had secured least 9 petajoules of additional gas from east coast producers, in line with ACCC recommendations.
“This changed outlook reflects the susceptibility of the supply/demand balance to short-term reductions in gas production and changes in LNG producers’ intended exports and swaps,” said ACCC commissioner Anna Brakey.
“The east coast supply and demand balance is projected to worsen further over the next few years, which will increase the impact of LNG producers’ decisions on the market. It remains crucial that LNG producers have regard to the domestic outlook before making any significant variations to export volumes or schedules.”
In southern states, the ACCC projects gas demand will be 127 petajoules. This is 40 petajoules higher than supply, double the area’s shortfall in Q3 2024, though the ACCC said adding surplus gas from Queensland and southern gas reserves would likely be sufficient to meet demand.
Prices have eased, however, with average gas prices in producers' supply contracts in 2025 dropping by around 10% in the second half of 2024 compared to the previous half year.
Gas shortfalls in Australia have grown as production has slowed at the Gippsland, Otway, and Cooper basins.
Victoria’s Longford gas plant, one of the largest gas sources for the southern and eastern states, also plans to wind down its operations as the Bass Strait’s gas reserves decline.
Demand has also fallen due to higher prices and increased electrification, the Australian Energy Market Operator (AEMO) reported last week. While the AEMO has revised its forecasts to reflect a lower risk of seasonal shortages in the next three years, it predicts a major deficit in gas supply will appear from 2028.
Opposition leader Peter Dutton said this week that a potential Coalition government would establish a gas reservation scheme, which would require Australia's gas producers to reserve a portion of supplies for domestic use.
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