Australia Natural Gas Market: Energy Supply, LNG Exports & the Future of Domestic Gas Demand
How industrial consumption, export commitments and infrastructure investment are shaping Australia’s natural-gas landscape
The Australia natural gas market reached USD 31.56 Billion in 2024 and is forecast to expand to USD 73.35 Billion by 2033, registering a CAGR of 8.8% for 2025–2033, according to IMARC Group. This trajectory reflects a dual dynamic: robust export demand for LNG from Asia-Pacific customers alongside persistent domestic needs for power generation, industry feedstock and transitional fuel use as Australia decarbonises. IMARC highlights LNG exports, technology advances in extraction and policy measures for energy security as core drivers supporting the forecasted growth.
What is the Australia Natural Gas Market Key Growth Drivers?
1. Strong LNG export demand across Asia-Pacific
Long-term contracts and rising LNG import needs in countries such as Japan, South Korea and China continue to underpin Australian export volumes. Geographic proximity to major importers, plus established liquefaction and shipping infrastructure, make Australia a favoured supplier for cleaner-burning gas as regional economies decarbonise.
2. Major upstream investments and project sanctioning
New and expanded upstream projects — including sanctioned drilling and field developments — are increasing recoverable reserves and near-term production capacity, providing feedstock for both domestic consumption and export terminals. Such capital investment supports supply continuity and underpins long-range export commitments.
3. Grid and pipeline upgrades improving domestic deliverability
Investment in transmission and conversion works — including targeted pipeline upgrades and conversion projects — is increasing interregional flows and helping balance seasonal demand spikes. These network upgrades reduce domestic supply imbalances and enable more flexible routing of gas from producing basins to southern and eastern demand centres.
4. Technology and efficiency gains in extraction & processing
Directional drilling, digital reservoir modelling, and liquefaction innovations are improving recovery rates and lowering unit costs. Incremental efficiency gains both reduce emissions intensity and expand the economic envelope for developing marginal fields, supporting longer asset lives and higher output.
5. Policy focus on energy security and transitional fuels
Federal and state initiatives that recognise gas as a bridging fuel — plus the emergence of hydrogen/blue-hydrogen integration opportunities — create demand-support frameworks. Policy levers aimed at domestic supply resilience (e.g., reservation schemes under discussion) and incentives for low-emissions pathways provide strategic tailwinds for continued investment.
Market Structure & Segmentation:
Type Insights: Compressed Natural Gas, Piped Natural Gas, Liquefied Petroleum Gas
Regional Insights: Australia Capital Territory & New South Wales, Victoria & Tasmania, Queensland, Northern Territory & Southern Australia, Western Australia
Recent News & Developments in the Australia Natural Gas Market
October 2025: EnergyQuest reported elevated export throughput in October 2025 — approximately 6.26 Mt of LNG (92 cargoes), representing around 73.7 Mtpa when annualised and reaching roughly 86% of Australia’s nameplate capacity. This strong export performance signals resilient international demand and operational capacity utilisation across Australia’s LNG plants, supporting export-led revenue even amid evolving price cycles.
March 2025: ExxonMobil Australia and Woodside approved a A$350 million final investment decision for the Turrum Phase 3 project in the Gippsland Basin to drill five new wells in the Turrum and North Turrum fields. The project is explicitly intended to shore up East Coast gas supplies and address projected shortfalls by the late 2020s — strengthening domestic energy security while feeding existing LNG facilities. The sanction demonstrates industry appetite for near-term upstream investment to stabilise supply.
August 2024 (sanctioning driving 2025–26 supply): Arrow Energy (Shell & PetroChina JV) sanctioned Phase 2 of the Surat Gas Project to add capacity — a program that includes up to 450 new wells and infrastructure expansions, targeting peak incremental production of roughly 22,400 BOE/D to feed Queensland LNG and domestic demand. The sanctioned build-out is a tangible supply response to medium-term market needs and points to multi-year production ramps.
Why Should You Know About the Australia Natural Gas Market?
Australia’s natural gas sector sits at the crossroads of national energy security and international trade. With IMARC forecasting growth to USD 73.35 Billion by 2033 at 8.8% CAGR, the market matters to multiple stakeholders: exporters seeking long-term contracts and price stability; industrial users relying on competitively priced baseload energy; policymakers balancing decarbonisation targets with reliable supply; and investors evaluating infrastructure and project-level opportunities (upstream drilling, pipelines, storage and LNG terminals).
Strategically, gas infrastructure provides optionality — supporting grid reliability, enabling hydrogen transition pathways (blue hydrogen/CCS), and acting as a bridge for sectors where electrification is challenging. Given current project activity, export momentum and targeted domestic investments, understanding Australia’s gas market is essential for energy planners, industrial consumers, financiers and trade strategists preparing for a transition that still depends on abundant and flexible gas supply.
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