Residents along Australia’s east coast could be forced to shiver through winter, with the national consumer watchdog warning of a looming shortfall.
The Australian Competition and Consumer Commission predicts supply for the heavily populated market could be nine petajoules (PJ) short from July to September, if liquefied natural gas producers export all their uncontracted gas.
The updated supply-demand forecast is 22 PJ worse than its quarterly report from December because of a fall in production and increased exports.
It comes as Opposition Leader Peter Dutton pitches a national gas plan ahead of the expected calling of the federal election for May 3.
In his budget reply speech on Thursday night, Mr Dutton promised to immediately set up a domestic gas reserve if elected.
The opposition leader said the plan would secure an additional 10 to 20 per cent of the east coast’s demand and suggested wholesale domestic gas prices would fall from more than $14 a gigajoule to less than $10 a gigajoule.
“This plan will prioritise domestic gas supply, address shortfalls and reduce energy prices for Australians,” Mr Dutton told the chamber.
WA already operates a policy requiring projects to reserve 15 per cent of offshore gas exports for the domestic market and prohibiting onshore exports.
Domestic demand for gas is usually highest as temperatures plummet.
In the southern states, the shortfall is projected to reach a historic high of 40 PJ for the quarter – twice as high as for the same period in 2024.
Declining production from the Gippsland, Otway and Cooper basins, as well as higher forecast demand for gas-powered electricity generation, is to blame for the worsening outlook.
The watchdog is confident the 40PJ gap can be bridged by transporting roughly 30PJ of surplus gas from Queensland and drawing about 10PJ from southern state gas stores.
“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,” ACCC commissioner Anna 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 watchdog has called for the federal government to work with producers to secure uncommitted additional gas to ensure the east coast market has enough to get through winter.
Australia’s three producers have sufficient uncontracted gas to supply the domestic market if made available, it said.
On a more positive note, analysis shows average prices for gas in 2025 producer contracts fell about 10 per cent to $13.58 per gigajoule and agreed volumes for supply increased in the second half of 2024 compared to the previous six months.
But Ms Brakey conceded there was “still a way to go”.
“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,” she added.
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