Australia faces a natural gas shortage along its eastern coast within the next two years unless new sources are made available for use, said a just-released report from the ACCC.
The shortfalls could appear in 2027, a year earlier than previously expected, said the country’s competition watchdog.
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The body said the latest assessment does not cover the supply squeeze that caused market players to issue a recent warming about possible coming shortfalls, as production issues continued and the nation undergoes a bout of cold weather.
Australia exports the majority of its natural gas, with the commodity proving to be a valuable source of income as it develops its extraction and production facilities.
Australia still ranks among the largest exporters of liquefied natural gas, even after losing the top spot to the US and Qatar in recent years.
In fact, Australia is now the world’s fifth-largest producer of natural gas, although the country’s output decreased by 5% in 2023 compared with 2022, according to research from GlobalData, Offshore Technology’s parent company.
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By GlobalDataThe country accounts for around 3% of global production.
In May 2024, the Australian Government released its Future Gas Strategy, putting natural gas at the centre of its plans to reach net zero by 2050 but drawing criticism from some environmental groups.
Although the strategy begins by noting that “Australia is committed to supporting global emissions reductions to reduce the impacts of climate change and will reach net zero emissions by 2050”, part of the strategy pushes Australia to obtain “new sources of gas supply” as they “are needed to meet demand during the economy wide transition” to net zero.
As for the upcoming shortages highlighted by the commission, the report argues that “long-term solutions to gas market shortfalls will require a range of policy and market responses [including] an urgent need to develop new sources of gas production and supply.”
The largest producers of natural gas in Australia are Chevron, Shell and Woodside Energy Group, revealed GlobalData. Chevron was the largest producer of natural gas in 2023, with output up by 0.14% on 2022.
Shell was the second-largest producer, with output up by 0.2%, and Woodside Energy Group was third with a decrease of 5% on the previous year.
