Wholesale gas on Australia's east coast is expected to be well supplied in quarter 4 of 2026 (October to December 2026), but further investment is needed to meet long-term demand, the ACCC's latest Gas Inquiry report reveals.
The east coast gas market is predicted to have a surplus of 13 petajoules (PJ) in quarter 4 of 2026 if the liquefied natural gas (LNG) producers export all their uncontracted gas.
While this is typically a period of lower gas demand due to milder temperatures, it is the highest forecast quarter 4 surplus since 2023.
The east coast is also forecast to be well supplied in quarters 1 and 4 of 2027.
As in previous years, supply over winter 2027 is expected to be tight. There is a risk of shortfalls in quarters 2 and 3 of 2027 if the LNG producers export all their uncontracted gas.
"Our analysis indicates the east coast gas market is expected to be well supplied in late 2026 and early 2027, although supply-demand conditions are likely to tighten in winter 2027, particularly in the southern states," ACCC Commissioner Anna Brakey said.
"Higher production volumes in coming quarters could be used to fill storage facilities ahead of increased demand next winter."
East coast supply-demand outlook for quarter 4 2026 and 2027 (PJ)
Source: ACCC analysis of data obtained from gas producers in April 2026 and of the domestic demand forecast (Step Change scenario) from AEMO, Gas Statement of Opportunities, March 2026.
Middle East conflict not materially affecting domestic gas prices so far
Global energy prices surged in the wake of the Middle East conflict but the disruptions to international markets have so far not resulted in a material impact on domestic gas prices.
This contrasts with 2022, when international conflicts contributed to high prices on Australia's east coast.
"One reason why there has been a smaller impact domestically is that market conditions differ to those during the 2022 global energy crisis," Ms Brakey said.
"In 2022, the global market was less prepared for shocks. Disruptions to global supply led to higher demand for Australian gas, but this demand coincided with higher domestic gas demand, depleted storage levels and domestic supply constraints, contributing to significant increases in domestic prices."
Spot prices are currently below 2025 averages, reflecting stable demand and supply during a relatively warm winter period.
Prices under contracts agreed during the first quarter of 2026 for gas supply in 2027 were lower than the previous quarter, though broadly in line with pre-conflict levels.
The June 2026 report covers long-term contracts agreed up to 31 March 2026, a short time into the conflict. The ACCC's next report in September 2026 will provide more evidence on any impacts the conflict has had on prices for long-term gas supply.
More investment in production is required to meet future demand
While short-term supply conditions have improved, the ACCC's latest forecasts indicate additional investment will be required to meet long-term east coast demand. This is despite gas consumption being projected to decline overall.
Investment by the Queensland LNG producers and their associates, who control 84 per cent of commercially viable gas resources, will be central to increasing supply. This is particularly important given the significant barriers faced by smaller producers and new entrants.
"Reducing barriers for new entrants and producers seeking to develop prospective resources would help increase and diversify supply, increase competition and put downward pressure on prices over the longer term," Ms Brakey said.
"In the context of the Government's proposed gas reservation scheme, policy settings should support the most efficient sources of supply and infrastructure investment."
To inform policy considerations, the June 2026 report provides updated information on the LNG producers' gas assets and export commitments, and on competition in upstream production.
Changes to production and export volumes may affect the impact of the reservation policy, including how much gas the policy will deliver to the domestic market.
Shining a light on gas storage
The report also analyses the availability and use of storage facilities on the east coast.
Storage services are expected to play an increasingly important role in meeting wholesale gas demand as southern production declines and demand for gas-fired electricity generation becomes more volatile, particularly after coal generators retire.
The ACCC's analysis shows Victoria's Iona Underground Gas Storage facility is critical to southern state markets, with few alternatives available to respond to periods of volatile demand, including seasonal peaks.
The report found there is significant unused capacity in other east coast storage facilities; however, commercial and technical constraints may limit how much of this additional storage can be made available to the market.
Final guidance on retailer selling practices
The ACCC has also published its final retailer selling practices guidance, following consideration of submissions received from gas market participants.
The guidance is intended to encourage a more customer-focused approach by retailers and to support more informed decision-making by commercial and industrial gas users.
The guidance is available on the ACCC's website.
Background
Australia's east coast gas market is an interconnected grid joining Queensland, New South Wales, Victoria, South Australia, Tasmania and the Australian Capital Territory. The Northern Territory and Western Australia are separate gas regions.
The ACCC's inquiry examines the wholesale gas market, primarily gas sold by producers to large gas buyers, including commercial and industrial gas users and gas retailers.
The ACCC's next interim gas inquiry report is scheduled for September 2026.
