Australia Natural Gas Market: Domestic Demand, LNG Exports & Infrastructure Development

According to IMARC Group, the Australia natural gas market reached a value of USD 34.46 Billion in 2025 and is projected to expand significantly to USD 73.82 Billion by 2034, exhibiting a robust compound annual growth rate (CAGR) of 8.83% during 2026–2034. This strong growth trajectory highlights natural gas’s dual role within Australia’s energy landscape—as both a critical domestic fuel source and a globally traded commodity. While renewable energy continues to expand, natural gas remains central to electricity generation, industrial production and export revenue generation. Supported by infrastructure investments and expanding liquefied natural gas (LNG) capabilities, the sector is reinforcing Australia’s position as a key energy supplier within the Asia-Pacific region and across Australia.

Why Should Smart Buyers and Investors Know About the Australia Natural Gas Market?

Strong Growth Outlook

With a projected CAGR of 8.83%, the natural gas sector offers significant expansion potential relative to many traditional energy segments.

Critical Role in Energy Security

Natural gas supports grid reliability, industrial operations and export revenue generation.

LNG Export Revenue Stability

Long-term contracts and strong regional demand provide visibility and financial resilience.

Infrastructure-Led Investment Opportunities

Pipeline, processing and LNG terminal development present capital-intensive, long-term infrastructure prospects.

Transition Fuel Positioning

Natural gas complements renewable energy growth, supporting energy transition pathways.

Recent Trends & Developments in the Australia Natural Gas Market

July 2025:

LNG export volumes strengthened amid rising demand from Asian energy markets.

April 2025:

Pipeline expansion projects advanced to enhance domestic distribution and supply reliability.

October 2024:

Investments in gas-fired generation increased to support renewable integration and grid stability.

The Australia natural gas market reflects the complexity of balancing energy transition objectives with economic growth and energy security. Supported by IMARC’s strong growth projections, the sector continues to benefit from expanding domestic demand, robust LNG export markets and ongoing infrastructure development. While renewable energy penetration accelerates, natural gas remains indispensable in providing dispatchable power and supporting industrial processes. For investors, infrastructure developers and energy stakeholders, Australia’s natural gas market represents not only a high-growth commodity segment but also a strategically positioned component of the broader energy transition framework—bridging traditional energy systems with emerging low-carbon technologies.

Australia Natural Gas Market Vision 2050

1. Balanced Energy Mix With Cleaner Gas Technologies

By 2050, natural gas is expected to remain part of the energy mix, potentially integrated with carbon capture and storage (CCS) technologies to reduce emissions intensity.

2. Expansion of LNG Infrastructure and Trade Networks

Continued investment in LNG terminals and export facilities will reinforce Australia’s role as a global supplier.

3. Integration With Hydrogen Production

Natural gas infrastructure may support blue hydrogen production, leveraging existing pipelines and processing facilities.

4. Digital Monitoring and Efficiency Optimization

Advanced digital technologies will enhance pipeline monitoring, safety compliance and operational efficiency.

5. Increased Regulatory and Environmental Oversight

Stronger environmental frameworks may drive cleaner extraction and processing practices, ensuring sustainable growth.

What Are the Key Growth Drivers in the Australia Natural Gas Market?

Rising Domestic Energy Demand

Domestic energy consumption continues to grow due to population expansion, industrial development and electrification trends. Natural gas plays a stabilizing role in power generation, particularly as coal-fired plants are retired and renewable generation fluctuates.

Sustained Growth in LNG Exports

Australia remains one of the world’s leading LNG exporters. Long-term supply contracts with Asian markets provide stable revenue streams and encourage upstream exploration and production investment. LNG demand from countries seeking cleaner alternatives to coal is strengthening export prospects.

Infrastructure Development and Expansion

Pipeline expansions, LNG terminal upgrades and gas processing facilities are enhancing supply chain efficiency and distribution reliability. Investment in transmission networks supports both domestic consumption and export logistics.

Role as a Transition Fuel

Natural gas is increasingly positioned as a transition fuel within decarbonization strategies. It provides lower-emission electricity generation compared to coal and supports grid stability as renewable capacity increases.

Industrial and Manufacturing Demand

Key industries—including chemicals, fertilizers, mining and food processing—depend on natural gas as both a fuel and feedstock. Stable supply ensures operational continuity across critical sectors.