The ACCC has forecast longer-term gas supply issues. 

Australia's east coast gas market is expected to have a surplus of between 69 and 110 petajoules in 2025, according to the latest report from the Australian Competition and Consumer Commission (ACCC). 

This surplus is contingent on Queensland’s LNG producers exporting all their uncontracted gas.

Despite this projected surplus, there remains a risk of a shortfall in the third quarter of 2025 due to heightened energy demand for heating during winter. 

The regulator says the extended operation of the Eraring Power Station has mitigated this risk, but LNG producers may still need to supply additional gas to the domestic market if a shortfall occurs.

Gas must also be transported from Queensland to southern regions, including the Australian Capital Territory, New South Wales, South Australia, Tasmania, and Victoria, to prevent local shortfalls in the second and third quarters of 2025.

The ACCC says the outlook for 2025 is sensitive to various factors, such as variable demand for gas-powered generation influenced by weather events and unscheduled maintenance in the electricity network. 

This variability underscores the need for adequate gas pipeline and storage capacity alongside production.

“Since the introduction of conditional exemptions from the Gas Market Code, there appears to have been an increase in the amount of gas being contracted between producers and buyers for supply in 2024 and 2025,” said ACCC Commissioner Anna Brakey. 

However, the commissioner said more time is needed to assess the full impact of the Gas Market Code on the market.

The report notes that while some additional supply may ease pressures in 2024 and 2025, most of the potential additional gas under conditional Ministerial exemptions will not be available until at least 2026.

The report highlights a continued decline in east coast gas market prices from their mid-2022 highs, returning closer to early 2022 levels. 

Producer prices for 2024 supply decreased by 2 per cent to $14.32 per gigajoule between August and December 2023, while retail prices fell by 16 per cent to $16.51 per gigajoule during the same period.

The ACCC report indicates that the east coast gas market may face supply shortfalls as early as 2027, a year earlier than previously forecast. This is due to increased gas consumption for power generation and delays in new gas projects. 

The extended operation of the Eraring Power Station has improved the outlook for 2027 but has not changed the overall supply trajectory.

The ACCC predicts southern states will rely heavily on gas transported from Queensland unless new supply sources are developed. 

From 2029, it says Queensland will also need new gas sources. If all projects identified under the Gas Market Code exemptions proceed, shortfalls could be delayed until 2028.

“With long-term export contracts for LNG producers due to expire from the mid-2030s, this presents a critical opportunity for policy considerations that promote efficient and secure domestic gas supply as well as the export of gas,” Ms Brakey added.