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Southern states to rely on Queensland gas surplus by 2026, ACCC warns

Written by Liezl GambePublished Dec. 22 2025Last Updated Dec. 22 2025

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Southern Australian states are expected to rely heavily on Queensland's surplus gas to meet demand by the second quarter of 2026, according to the latest gas inquiry report from the Australian Competition and Consumer Commission.

The report indicates that while overall gas supply across the east coast is projected to remain sufficient, Victoria, New South Wales, South Australia, Tasmania, and the Australian Capital Territory will collectively require additional gas from Queensland to fill shortfalls.

The ACCC's forecasts show the east coast gas market could swing between a 15-petajoule surplus and an eight-petajoule shortfall, depending on uncontracted gas exports from Queensland LNG producers.

Excluding Queensland’s contribution, the southern states would face a combined shortfall of 26 petajoules over the quarter.

Victoria's Iona gas storage facility alone is estimated to need a further 12 petajoules before May 2026 to prepare for winter.

Despite these supply challenges, gas prices remain within expected ranges, with contracted rates steady at $13–15 per gigajoule.

ACCC Commissioner Anna Brakey noted that the widening gap between supply and demand in the south is driven by declining output from legacy fields and increased gas use for electricity generation.

"Some of Queensland's surplus gas will need to be transported south to fill the forecast supply gap," Brakey said, adding that while prices have stabilised, commercial and industrial users continue to face difficulties in securing long-term contracts, which are essential for cost predictability and supply certainty.

The ACCC's ongoing gas market inquiry, launched in 2017 under Treasurer Jim Chalmers, will continue until June 2030, with the next interim report expected in March 2026.