While there is forecast to be an overall surplus next year, there is a risk of a shortfall in the third quarter when demand for energy is typically higher due to demand for heating in winter. The risk has reduced with the extended operation of Eraring Power Station but, if a shortfall does occur, LNG producers will need to commit a small amount of additional gas to the domestic market to ensure there is sufficient supply.

Gas will also need to be sent from Queensland to southern jurisdictions (the Australian Capital Territory, New South Wales, South Australia, Tasmania, and Victoria) to avoid local shortfalls in both the second and third quarters of 2025.

As in recent years, the outlook for 2025 is sensitive to several factors, including variable demand for gas-powered generation induced by weather events and unscheduled maintenance and outages in the electricity network. The variability of demand for gas and reliance on interstate transfers of gas emphasise the need for sufficient gas pipeline and storage capacity, in addition to gas production.

“Since the introduction of conditional exemptions from the Gas Market Code, there appears to have been an increase in the amount of gas being contracted between producers and buyers for supply in 2024 and 2025,” ACCC Commissioner Anna Brakey said.

“While the increase in contracting activity is a positive sign, more time is needed before we can see what impact the Gas Market Code is having on the operation of the gas market, including how suppliers are making their gas available to the market as well as engaging with gas buyers.”

The report covers the first four months of the Gas Market Code’s full operation, and this was a period of relatively quiet market activity.

Given this, there is not sufficient data in this report to draw conclusions about the impact of the Code on prices. Further, the ACCC expects that most gas produced in 2024–25 will not be subject to the Code’s price rules. Some additional supply secured under conditional Ministerial exemptions from the Code may help ease pressures in 2024 and 2025, but much of the potential additional gas identified via conditional Ministerial exemptions will not become available until at least 2026.

The latest report’s forecast remains on track with previous forecasts for the fourth quarter of 2024. A small surplus of 7 petajoules is forecast if Queensland’s LNG producers export all their current uncontracted gas, or 19 petajoules if they only export their currently anticipated spot sales.

The report found that east coast gas market prices have continued to decline from their highs in mid-2022 and are now closer to levels last seen in early 2022. This decline can be seen in both producer and retail prices.

The prices offered by producers for 2024 supply fell by two per cent between August and December 2023 to $14.32 per gigajoule. The prices offered by retailers for 2024 supply also fell over this period, by 16 per cent to $16.51 per gigajoule.

Go here to read the full statement by the ACCC