Australian regulator expects a balanced gas market on the east coast in Q2; South will rely on Queensland

Australia's east-coast gas market will be in balance by the second quarter of 2026. Southern states are likely to rely heavily on?gas stored in Queensland and surpluses from Queensland to meet demand, according to the competition regulator.

According to the Australian Competition and Consumer Commission's (ACCC) latest gas inquiry report, the east coast market will have a balance between supply and demand of 15 petajoules (PJ) and an 8 PJ deficit in the second quarter 2026.

The'southern states' are also expected to require an extra 26 PJ over the same period.

The gap between the gas supply and demand from southern sources has widened over recent years. This is largely because of reduced production from 'legacy gas' fields and an increase in demand for gas-powered electric generation, said ACCC Commissioner Anna Brakey.

The report noted that the domestic prices of the commodity were within expected ranges, but they are being sold more quickly than in previous years.

Reports claim that the shift to shorter-term contracts for?gas is challenging buyers who prefer longer-term agreements because they provide cost certainty. It may also affect?investments in user facilities and infrastructure supply, according to the report.

The ACCC warned of a possible gas shortage along the East Coast in July 2024. It called for urgent development of new sources for production and supply.

Since then, the government has intensified efforts to secure additional gas supplies from producers for the winter season.

Separately Australia proposed on Monday a policy of natural gas reservations that would require the exporters to reserve 15% to 25% of their gas production for domestic consumption.

(source: Reuters)