Australia Oil and Gas Market: Export Strength, Energy Transition & Emerging Risks

Market Overview

• According to the latest IMARC data, the Australia Oil & Gas Market was valued at USD 406.0 million in 2024, with forecasts projecting it will reach USD 711.5 million by 2033, registering a CAGR of approximately 6.43% between 2025-2033.
• The market is segmented into upstream, midstream, downstream operations; offshore vs onshore production; and regional breakdowns across Australia. Key applications include LNG export, domestic gas supply, petroleum products for power generation, industrial usage, and petrochemicals.
• Growth is driven by increasing energy demand (both domestic and international), investments in exploration & production (E&P), expansion of LNG infrastructure, government policies favoring energy security, and technological advancement. At the same time, environmental concerns, regulatory oversight, and global energy transition pressures are influencing decision-making.

Key Trends & Market Drivers

1. LNG Expansion & Export Demand

Australia remains a major player in LNG exports. Ongoing and planned LNG facilities, along with pipeline and export terminal upgrades, are central to maintaining and growing export volumes. Demand from Asia-Pacific markets continues to be a key driver.

2. Natural Gas as a Transition Fuel

Given global pressure to reduce carbon emissions, natural gas is increasingly viewed within Australia as a transitional energy source. Its lower emissions relative to coal make it more acceptable in policy frameworks, especially when paired with carbon capture, renewables integration, or cleaner supply chain practices.

3. Technological & Digital Integration

Oil & gas upstream, midstream, and downstream operations are adopting AI, advanced analytics, automation, and “digital twins” to improve efficiency, reduce costs, and mitigate risks (e.g. in exploration, monitoring, asset maintenance).

4. Regulatory & Environmental Pressures

Environmental regulation, emissions constraints, and land / marine / indigenous heritage concerns increasingly shape project approvals. Policy actions (e.g. domestic gas reservation, local supply mandates, ESG requirements) are influencing both investment and operations.

5. Domestic Supply & Infrastructure Challenges

Some Australian states face potential future gas shortfalls or supply constraints, particularly in southern Australia. Regulatory delays, aging infrastructure, and declining fields (e.g. Longford) are prompting infrastructure upgrades, new pipelines, and import terminal proposals.

Get a PDF & Request for a Free Sample Report: https://www.imarcgroup.com/australia-oil-gas-market/requestsample

Opportunities in the Australia Oil & Gas Market

• Infrastructure Investment for Domestic Supply Security

Projects like gas pipelines, LNG import terminals, and regasification units offer strong potential. Strengthening domestic supply, especially in areas projected to face shortages, can provide viable returns.

• New Field Development & Exploration

Offshore and onshore exploration, including emerging resources in the Beetaloo Basin, Narrabri, Scarborough, Barossa, Dorado, etc., represent opportunities. Earlier investment can secure upstream assets before supply tightens.

• Technology, Efficiency & Decarbonization

Companies that invest in carbon capture & storage (CCS), low-emissions extraction techniques, digitalization, and AI-driven operational efficiency can reduce costs and meet regulatory or ESG criteria. These can be differentiators.

• LNG Import & Regasification Projects

Given forecasted domestic shortfalls (especially south-east Australia), developing or investing in LNG import infrastructure and floating storage & regasification units (FSRUs) is a timely opportunity.

• Strategic M&A & Asset Transfers

With some projects in decline or regulatory burdens increasing, opportunities for restructuring, acquiring underutilized fields, or partnering for large projects like those in the Gippsland Basin are present.

• Diversification into Hydrogen & Low-Carbon Fuels

Projects like liquid hydrogen supply chains (e.g. Woodside’s H2Perth) show how oil & gas companies can diversify into future-oriented energy exports. These align with global energy transition trends and policy incentives.

Recent News & Developments in the Australia Oil & Gas Market

• Woodside Revises 2025 Output Guidance & Costs (Aug 2025)

Woodside Energy narrowed its production guidance for 2025, citing operational and regulatory headwinds. Still, its cost per barrel equivalent of production is expected to fall, showing efficiency efforts.

• Vopak’s LNG Import Terminal Deal in Victoria (Late Sep 2025)

Vopak secured a vessel (FSRU) for its LNG terminal project in Port Phillip Bay, Victoria. This move addresses concerns of gas shortages in southeast Australia by ensuring supply capability starting around 2029.

• APA Group Pipeline Expansion (2025)

APA is investing heavily (~USD tens of millions) to expand pipeline capacity (East Coast Gas Grid, Moomba-Sydney pipelines, etc.) to reduce dependence on imports and accommodate future supply, especially from basins such as Beetaloo and Surat.

• Woodside Takes Control of Gippsland Assets (2025-2026)

Woodside is acquiring control over key gas assets in the Gippsland Basin from Esso (Exxon’s Australian operations). These include infrastructure like the Longford Gas Plant and potential reserves supply, to ensure East Coast gas supply amidst forecasts of deficits.

• Narrabri Gas Project Gains Political Backing (2025)

The Narrabri Gas Project, owned by Santos in NSW, has secured endorsement from state leadership and political figures, citing its potential to supply up to half of NSW’s gas needs and contribute significantly to regional jobs and industrial energy reliability.

• Emerging Hydrogen Supply Chain Partnership (2025)

Woodside has entered into a partnership with Japan Suiso Energy and KEPCO to develop a liquid hydrogen supply chain between Australia (H2Perth) and Japanese terminals—a sign of diversification into emerging low-carbon export energy.

• Relaxation of Environmental Conditions for North West Shelf Project (Sep 2025)

The Australian federal government agreed to weaken proposed environmental protection conditions for Indigenous rock art in Murujuga, Western Australia, to accommodate Woodside’s North West Shelf gas project. The final requirements involve phased emissions cuts rather than stricter immediate standards.

Browse Full Report with TOC & List of Figures: https://www.imarcgroup.com/australia-oil-gas-market

• For investors, the Australia oil & gas market presents tangible growth potential but with heightened regulatory, environmental, and supply risks. Those who can navigate approvals, community concerns, and technological change will likely lead returns.

• For energy security, domestic supply challenges in certain regions make projects like pipelines, LNG imports, and gas field expansions critical. Delays or regulatory gridlock could have cost and reliability implications.

• For policy and ESG-focused stakeholders, the tension between climate targets and fossil fuel infrastructure is increasingly central. Companies are under pressure to reduce emissions, manage heritage / environmental concerns, and align operations for a low-carbon transition.

• For export and trade dynamics, Australia’s LNG capacity and global demand (especially in Asia) remain key. Diversification (e.g. into hydrogen) will be important to maintain relevance as global energy demand shifts.