The ACCC is predicting gas supply in the east coast gas market could fall short by 9 petajoules (PJ) in the period July to September 2025, if LNG producers export all their uncontracted gas, according to its updated assessment.



This period, which includes winter months, usually sees the highest demand domestically for gas due to colder temperatures.



The ACCC’s short-term update indicates the supply-demand forecast has dropped by 22 PJ since the December 2024 quarter report, due to a fall in production and increased exports.



In the southern states, the supply shortfall is projected to reach a historic high of 40 PJ for the quarter.



The revised outlook coupled with market risks, such as higher demand for gas in case of unexpected weather events or outages of coal-fired power plants, increases the risk of a shortfall across the east coast without access to the LNG producers’ surplus gas.



“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,” ACCC Commissioner Anna Brakey said.



“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.”



“To ensure that the east coast gas market has enough gas this winter, including through any significant demand or supply shocks, we recommend that the Australian Government work with LNG producers to secure additional gas, which is currently uncommitted, for the domestic market,” Ms Brakey said.



Chart 2: Quarterly supply demand outlook for quarter 3, 2025 (PJ)







Source: ACCC analysis of data obtained from gas producers in January 2025 and of the domestic demand forecast (Step Change scenario) from AEMO, Gas Statement of Opportunities (GSOO), March 2025.



  Note:     Totals may not sum due to rounding.

Shortfall of gas supply in the southern states doubles



The predicted 40 PJ shortfall of gas in the southern states for the third quarter of 2025 is twice that of the same time in 2024.



This is mainly due to declining production from the Gippsland, Otway and Cooper basins, and higher forecast demand for gas-powered electricity generation.



The ACCC projects that the 40 PJ gap will be able to be met by transporting surplus gas from Queensland (about 30 PJ) and drawing on southern state gas stores (about 10 PJ).



“Pleasingly, we expect that there will be adequate gas and sufficient pipeline and storage capacity to meet the shortfall in the south. But, without access to the LNG producers’ surplus gas, the current outlook provides very little buffer for unexpected events, including extreme weather, higher than allowed-for demand, or higher than usual outages in coal-fired power stations,” Ms Brakey said.



“Actual supply and demand for the third quarter of the year could surprise on the up or down sides. But with not enough new supply coming online to offset declining production in the southern states and higher, more volatile, demand for gas-powered generation, there needs to be a bigger buffer for downside risks.”



The report highlights the importance of sufficient storage in the southern states in averting a shortfall.



“Iona underground storage is essential to meet winter demand,” Ms Brakey said.



Chart 2: Southern states outlook for quarter 3, 2025



                        



Source: ACCC analysis of data obtained from gas producers in January 2025 and of the domestic demand forecast (Step Change scenario) from AEMO, Gas Statement of Opportunities (GSOO), March 2025.



  Note:     Totals may not sum due to rounding.

Government response to ACCC report 



The ACCC report recommended that the Australian Government work with LNG producers to secure additional gas, which is currently uncommitted, for the domestic market, to ensure that the east coast gas market has enough gas this winter.  



The ACCC recognises the commitments made by the LNG producers to the government and welcomes the progress this represents. It is important that LNG producers ensure that the needs of the domestic market are met before they export gas that is currently uncontracted.



“It is an important step for the LNG producers to fulfil the commitments they have made to the government in order to reduce the risk of a shortfall eventuating over the July to September period if all uncontracted gas was exported,” Ms Brakey said.



“Our March report identified that, between them, the three LNG producers have sufficient uncontracted gas to supply the domestic market if they make it available.”



“We will continue to report quarterly on the supply and demand balance in the market.”

Long-term gas contract update shows prices have eased 



In another update to the market released today, ACCC analysis of contracts for supply over 2025 and 2026 shows that prices eased, and agreed volumes for supply increased, over the six months to December 2024 compared to the preceding six months.



The average price for gas in producer contracts for supply in 2025 fell by about 10 per cent (to $13.58 per gigajoule) in the second half of 2024 compared to the previous six months. Prices in retailer gas supply contracts dropped slightly in the same period, to an average of $14.51 per gigajoule (GJ).



Average producer prices for 2026 supply fell by 2 per cent to $13.94 per GJ compared to the first half of 2024. Retailer prices averaged $13.55 per GJ. “This report shows encouraging signs on gas supply, but there is still a way to go,” Ms Brakey said.



“While the increase in contracted gas and the reduction in prices are positive developments, the total volumes for 2025 and 2026 remain significantly below those contracted before the energy crisis for 2021 and 2022.”

Background



In 2017, the Australian Government directed the ACCC to conduct a wide-ranging inquiry into the supply of and demand for natural gas in Australia, and to publish regular information on the supply and pricing of gas. The ACCC will conduct the inquiry until 2030.



The Interim update on east coast gas supply-demand outlook provides an updated picture on the gas supply-demand balance for the east coast gas market for quarter 3 of 2025. The ACCC reports quarterly on the gas supply outlook which provides information that assists Government decision making, including in relation to the ADGSM.



The Interim update on long-term contract prices for July - December 2024 provides updated pricing and other information on contracts agreed for long-term supply of gas (for terms of 12 months or more) on the east coast market during the period July to December 2024. This report is in response to a request from the Minister for Climate Change and Energy on 14 November 2024 to increase the frequency of reporting on gas supply agreements as an interim means of improving the transparency of gas prices.

ACCC Warns of Gas Supply Shortfall in Eastern Australia for Winter 2025

The Australian Competition and Consumer Commission (ACCC) has released an updated assessment indicating that the east coast gas market may face a shortfall of 9 petajoules (PJ) during the winter months of July to September 2025. This period typically experiences the highest domestic demand for gas due to colder temperatures.

The ACCC's latest report reveals a significant drop in the supply-demand forecast, which has decreased by 22 PJ since the previous report in December 2024. The southern states are expected to see a historic shortfall of 40 PJ, primarily driven by declining production from key gas basins and increased demand for gas-powered electricity generation.

Commissioner Anna Brakey emphasized the importance of LNG producers considering the domestic market's needs before making decisions on export volumes. The ACCC recommends that the Australian Government collaborate with LNG producers to secure additional uncommitted gas for the domestic market to mitigate potential shortfalls.

In a related update, the ACCC noted that long-term gas contract prices have eased, with a 10% reduction in average producer prices for 2025 compared to the previous six months. However, the total volumes contracted remain significantly below pre-energy crisis levels.

The ACCC has been tasked by the Australian Government to conduct an ongoing inquiry into the supply and demand for natural gas, with regular updates provided until 2030. This latest report aims to inform government decision-making regarding gas supply and pricing.



ACCC Warns of Gas Supply Shortfall in Eastern Australia for Winter 2025

The Australian Competition and Consumer Commission (ACCC) forecasts a potential gas supply shortfall of 9 petajoules in the east coast market for July to September 2025, primarily due to increased exports and declining production.