Report predicts gas crunch
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The ACCC has warned of long-term east coast gas shortages, despite a current surplus.
The Australian Competition and Consumer Commission (ACCC) has projected an improved short-term outlook for Australia’s east coast gas market, with surpluses anticipated in 2025 and 2026.
However, the regulator warns of significant challenges ahead, including a structural decline in domestic supply and barriers to investment in new production.
The ACCC forecasts a gas surplus of 77 to 112 petajoules in 2025 and 54 to 99 petajoules in 2026. This improved outlook is driven by higher gas production in Queensland and shifts in contracted export volumes to off-peak domestic demand periods. Gas swap arrangements, which optimise supply by balancing peak and off-peak demands, also contribute to this surplus.
Despite these gains, seasonal shortfalls are expected in southern states during winter.
“The southern states are projected to be in shortfall over the winter months and will continue to rely on gas from Queensland or storage to meet peaks in demand,” ACCC Commissioner Anna Brakey says.
The ACCC’s latest report highlights several hurdles to ensuring long-term gas security.
These include protracted regulatory approval processes, high upfront capital costs, uncertain policy environments, and limited competition in upstream gas markets.
“Significant barriers are preventing new domestic gas supply from becoming available. Without interventions, the east coast could face structural gas shortfalls from 2027 unless supply increases or demand decreases,” Commissioner Brakey said.
The ACCC says gas is playing a critical role in Australia’s energy transition, calling for explicit integration of gas in government energy planning.
The regulator say that a proposed gas market system plan, akin to the Integrated System Plan for electricity, could help coordinate investment and planning to stabilise supply.
Additionally, the report calls for continued domestic production to mitigate risks associated with relying on international LNG markets.
“Imported gas may provide flexibility, but it comes with higher costs and greater exposure to international market volatility,” the report noted.
The stas show that the energy crisis of 2022 drove prices to unprecedented highs, but market conditions have since improved.
Between January and June 2024, producer prices for 2025 supply fell by 2%, averaging $14.77 per gigajoule, while retailer prices declined by 13% to $15.43 per gigajoule. These reductions align with increased domestic gas availability and falling international prices.
However, the ACCC has identified shortcomings in retailer behaviour.
Practices such as offering limited contract terms and insufficient pricing transparency have drawn criticism.
“There is no evidence of systemic problems in pricing, but some selling practices fall short of expectations,” Brakey said.
To address this, the ACCC plans to publish best practice guidelines for retail selling in 2025.
