Southern states to rely on Queensland gas supply
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The news: The Australian Competition and Consumer Commission's (ACCC) latest gas inquiry report has found that the southern states will be relying on gas stores and Queensland's surplus gas to meet demand by the second quarter of 2026.
Overall gas supply is expected to be sufficient during the second quarter, despite the reliance of Victoria, New South Wales, South Australia, Tasmania and the Australian Capital Territory on Queensland. The Northern Territory and Western Australia are separate gas regions.
The numbers: The latest forecasts for the second quarter published by the ACCC, and derived from gas producers, indicates that the east coast gas market will bounce between a 15 petajoule surplus and an eight petajoule shortfall. This is dependent on uncontracted gas exported by Queensland LNG producers.
When excluding Queensland from the measure, the southern states are collectively expected to need an extra 26 petajoules over the quarter.
Victoria's Iona gas storage facility, as of 22 December, is estimated by the ACCC to need a further 12 petajoules of gas before May 2026 to gear up for winter.
The latest inquiry found pricing is within expected ranges, with contracted gas prices steady at about $13-15 per gigajoule.
The context: The ACCC began an inquiry into the gas market in 2017 and has continued this inquiry under the direction of Treasurer Jim Chalmers. It is expected to keep running this inquiry until 30 June 2030. The next interim report is due in March 2026.
What they said: “The gap between gas demand and supply from southern gas sources leading into and through winter has widened in recent years, largely due to reduced production from legacy gas fields and increased demand for gas-powered electricity generation,” ACCC Commissioner Anna Brakey said.
“Some of Queensland’s surplus gas will need to be transported to the southern states to help fill the forecast supply gap in the second quarter of 2026.”
Brakey said that while prices have stabilised, commercial and industrial gas users are warning that the current price levels "continue to pose challenges to the viability of their businesses".
“These challenges are exacerbated by difficulties in obtaining long-term agreements for gas supply. Short-term contracts do not provide the cost predictability and supply certainty that longer-term contracts provide.”
The sources: ACCC media release, ACCC gas inquiry 2025 interim report
