Australia’s projected gas shortage has been pushed back by a year, with increased production expected to sustain supply until at least 2029.
According to the Australian Energy Market Operator (AEMO), gas producers had responded to calls for greater domestic supply, deferring the anticipated structural shortfall originally forecast for 2028. Energy Minister Chris Bowen credited government policy for the improved outlook.
“Three years on from the gas bin fire we inherited from the former Coalition government, there are signs our policy is paying off – with the domestic market outlook improving and now secure into 2029,” Bowen said.
The government has leveraged the threat of limiting liquefied natural gas (LNG) exports from Queensland to secure additional supply from producers, with Australia Pacific LNG (APLNG) set to confirm a 40 petajoule (PJ) commitment on Thursday. Origin Energy, which holds a 27.5% stake in APLNG, will supply 10 PJ annually for the next four years.
Long term concern
Despite this increase, concerns remain over long-term gas availability, particularly for seasonal spikes in winter. AEMO has previously warned that inadequate reserves could lead to shortages as early as 2028, with emergency alerts already issued in 2024 due to low storage levels.
Prime Minister Anthony Albanese declined to guarantee that electricity prices would stabilise or fall under a second Labor term, attributing energy price pressures to global inflation and the impact of geopolitical events.
“Well we know that we have, international impact of global inflation has had an impact,” Albanese said. “The Russian invasion of Ukraine had an impact on energy prices.”
AEMO chief executive Daniel Westerman emphasised the need for further investment in gas infrastructure, including new production, storage, and LNG import terminals, to address declining supply in southern states.
“This year’s gas adequacy report again highlights the structural changes in the east coast gas market, particularly that production is falling faster than demand in the southern states, reinforcing the need for investment in new gas supply,” he said.
“Investment could include new production, storage, transportation, and liquefied natural gas (LNG) regasification terminals, or a combination of these solutions.”
While some argue LNG imports could help stabilise prices, critics warn reliance on external supply may drive domestic costs higher.