Australia's east coast gas market is expected to have a six petajoule (PJ) surplus in the third quarter of 2024, even if the three LNG producers export all their uncontracted gas, the ACCC's March 2024 interim gas inquiry report shows.
This forecast is a 10 PJ improvement since the ACCC's December 2023 gas inquiry report and is the first time the ACCC has forecast a supply surplus for the third quarter of 2024.
"A small surplus for the peak demand winter months is positive, but we would caution that the outlook is subject to some uncertainty in both supply and demand," ACCC Chair Gina Cass-Gottlieb said.
"The storms in Victoria in February, which led to coal power station outages and increased demand for gas-powered generation, are an important reminder that demand forecasts can quickly change."
On a regional basis, the southern states of Victoria, New South Wales, South Australia, and Tasmania are expected to need at least an additional 25 PJ of gas to meet demand in the third quarter this year.
However, Queensland is forecast to have a 30 PJ surplus, even if the LNG producers export all their uncontracted gas.
Demand in the southern states is expected to be met through gas already held in storage there and pipeline capacity allowing transport of Queensland's excess gas south.
The Iona underground gas storage facility in Victoria held 22.5 PJ of gas on 15 January 2024, which is the highest January volume recorded at that facility.
"We expect the volume held at the Iona storage facility will reduce some reliance on pipelines in the third quarter of this year," Ms Cass-Gottlieb said.
"Gas from storage is more likely to be needed on peak days, such as when cold weather increases southern demand alongside commercial and industrial consumption."
Quarterly supply demand outlook for quarter 3 2024 (PJ)
Source: ACCC analysis of data obtained from gas producers in January 2024 and of the domestic demand forecast (Step Change scenario) from AEMO, Gas Statement of Opportunities (GSOO) AEMO, March 2024.
Note: Totals may not sum due to rounding.
Regional supply outlooks for quarter 3 2024 (PJ)
Source: ACCC analysis of data obtained from gas producers in January 2024 and of the domestic demand forecast (Step Change scenario) AEMO, GSOO, March 2024.
Note: Totals may not sum due to rounding.
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 after the Government extended it in 2019 and again in 2022.
This report relates to the near-term outlook for the third quarter of 2024 only. The ACCC's most recent long-term outlook in its December 2023 interim report forecast that shortfalls would be likely from 2028 unless production was expanded, or demand significantly reduced. The ACCC will continue to examine the long-term outlook in its June 2024 interim report.
