ACCC warns of east coast gas shortfall as federal government downplays supply risk
While the federal government has played down the nation’s gas supply issues in the lead-up to next month’s election, new figures are painting a dire picture.
On the same day as resources minister Madeleine King was highlighting the government’s moves to strengthen the nation’s domestic gas security mechanism, a report from the Australian Competition and Consumer Commission (ACCC) is forecasting a major supply shortfall risk for the east coast gas market.
The ACCC report concluded that the east coast outlook for Q325 had worsened and that the market will need access to LNG producers’ uncontracted gas to mitigate the risk of shortfall.
Supply-demand balance
The latest forecasts indicate a gas supply-demand balance of between a 6 petajoule surplus and a 9PJ shortfall, depending on how much uncontracted gas LNG producers export.
This is a significant decline in the outlook since the ACCC’s forecast surplus of 22PJ in its December 2024 report.
According to the ACCC, the main causes of the change in outlook are declines in gas production and LNG producers’ net contributions to the domestic market.
Demand marginally down
“Forecast supply for 3Q 2025 is 14PJ less than our last forecast and now estimated to be 493PJ, [while] forecast demand for the quarter has marginally decreased,” the ACCC report noted.
“In addition, the LNG producers intend to supply 7PJ less back to the domestic market through seasonal gas swap arrangements and to export an additional 3PJ under their long-term foundational contracts.”
The report found that the worsened outlook had been primarily caused by decline in forecast production of 13.6PJ across multiple basins and projects.
Historic shortfall
The ACCC is now projecting the supply shortfall for the southern states in Q3 to be a historic high of 40PJ .
“This change reflects the inherent uncertainty of forecasting, but also the susceptibility of the outlook to short-term changes in gas production and the availability of LNG producer gas in circumstances of declining production from existing fields in the southern states,” the ACCC stated.
The ACCC is projecting the east coast supply-demand balance to tighten in the next few years, increasing the impact on the east coast gas market of LNG producers’ decisions.