The Australian Competition & Consumer Commission (ACCC) has confirmed Australia’s east coast gas market should have a 1.4 petajoule (PJ) surplus in the first quarter of 2024, even if the LNG producers export all their uncontracted gas. 

The ACCC’s September 2023 interim gas inquiry report forecasts the supply and demand balance for the east coast market for wholesale gas between January and March next year, which is a period of high LNG export demand and reduced residential gas heating demand due to warmer weather.

On a regional basis, Australia’s southern states are forecast to have about a three PJ surplus to meet local demand, but Queensland will need about one PJ of additional gas to meet its local demand if the LNG producers export all their uncontracted gas.

“We expect gas swap arrangements will play an important role in balancing gas supply needs across 2024,” ACCC Commissioner Anna Brakey said.

“The LNG producers have entered into gas swap arrangements with other gas businesses to access additional gas for export during the summer months. Under these arrangements, they will then return the gas to market in higher demand periods, such as the winter months.”

Recent investments in key pipeline infrastructure have also made it easier to transport gas between northern and southern states, and additional upgrades currently underway are expected to be completed by winter next year.

Australian Energy Producers Chief Executive Samantha McCulloch said while the report provides a positive outlook for the next six months, the ACCC did not update their long-term outlook with forecast shortfalls still likely from 2027 unless production is expanded.

Ms McCulloch said: “The ACCC is clearly still aware of the risks to the market of unexpected surges in gas demand if coal or renewable generation is unavailable as well as the need for new gas supply to reduce the risks of shortfalls in coming years.

“New gas supply is urgently needed and can put downward pressure on prices, reduce emissions by replacing coal and deliver substantial economic benefits to Australians.

“Investment is particularly needed in the southern states of NSW and Victoria where huge populations rely on gas.”