Australia is blessed with abundant natural resources, many of which will be critical for the energy transition.

We have some of the best renewable energy resources (i.e. sun and wind) in the world, and we are also blessed with some of the best natural gas resources.

There are estimated to be over 31,000 petajoules in Queensland’s Surat and Bowen basins,¹ and the Northern Territory Government estimates that there are over 200,000 petajoules of gas in place in the Beetaloo.²

To put into perspective just how much gas this is, Victoria, which is one of the largest gas users on the east coast, used 181 petajoules of gas in 2024.³ 

Australia has a lot of gas.

And just like our renewable energy resources will be critical in getting us to net zero, both the Federal Government’s May 2024 Future Gas Strategy and the Australian Energy Market Operator’s (AEMO) June 2024 Integrated System Plan confirm that natural gas is an important part of the energy transition too.

However, both the Australian Competition and Consumer Commission (ACCC) and AEMO are forecasting potential gas shortfalls in southern states later this decade.

Declines in production from legacy Victorian gas fields and failure to bring on new supplies are the primary reason for the expected shortfalls. Urgent action is required.

At APA, we’re generally agnostic to where gas comes from. We would be storing and transporting the gas, regardless of its origin. But, as Australia’s largest energy infrastructure company, we believe we need to ensure our market and policy settings result in gas supply that is low cost and reliable - for our customers, for industry, and for consumers.

Imported LNG will be significantly more expensive 

For a country so rich in natural gas resources, it would be inconceivable to most domestic consumers that governments are considering liquid natural gas (LNG) import terminals to resolve potential gas shortfalls on the east coast.

The fact is, international gas prices are far higher than domestically produced gas, even when global prices fall in the northern hemisphere’s summer months. 

The Future Gas Strategy estimated the cost of production and delivery of domestic gas to Melbourne from Surat, Narrabri and Beetaloo to be around $9 to $13 per gigajoule.⁴

This compares to an Asian LNG spot price of between $17.81 and $21.58 per gigajoule over the 2024 winter and summer.⁵

These imported LNG prices would not be the delivered price to Australian customers, as they do not include regasification costs, import terminal fees and pipeline transport to local markets.

Hence, LNG imports will likely lead to significantly higher prices for Australian businesses and consumers. 

Research by Frontier Economics suggests gas prices could double for Australia’s east coast industrial customers if LNG imports were to set the domestic gas price throughout the year.⁶

This is clearly not a viable solution for a strong Australian economy and a future made in Australia. 

Australia’s industries, many of which are dependent on gas, simply won’t be able absorb the higher costs that would result from LNG imports. For example, steel and brick manufacturers that supply materials to build our homes, fertiliser manufacturers that support our farmers, and laundries that support our hospitals, will all need to pass on higher gas costs to their customers.  

The Federal Government introduced a gas price cap in 2022, in part because LNG exports were setting the price of domestic gas. That is, international LNG prices, which are beholden to global issues, were setting the floor price for Australia’s domestic gas.

The irony is that any regulatory or policy support for LNG import terminals could lead Australia back to where it started – with LNG imports setting the floor price domestically. 

Unlocking domestic gas supply with the right policy and regulatory frameworks is the key to a low cost and sustainable energy system.

APA’s expansion plan will support a low cost and sustainable energy system

Understandably, governments need confidence that the market will invest to deliver gas where and when it is needed.

On 24 February 2025, APA announced a five-year East Coast Gas Grid Expansion Plan which will help to deliver gas from the north of Australia to meet southern market demand. Two elements of the plan have reached Final Investment Decision and will deliver new capacity in 2025 and 2026.

If the full plan progresses to FID with support from customers, the resulting investment will deliver a ~24% increase in north-to-south gas transport capacity and new southern markets gas storage (see Figure 1 below). This will provide Australian households and industry with the reliable and affordable energy they need and fuel the gas-powered generation capacity that will underpin our energy transition.  

APA’s modelling, using data from AEMO’s Gas Statement of Opportunities, shows the Plan will address east coast gas demand until 2032 (see Figure 2). This would mean avoiding the market shortfalls forecast by AEMO and the ACCC, with the capacity to deliver further incremental expansion as needed.

Importantly, the Plan allows domestic gas, rather than imported LNG, to address the decline in production from Victorian gas fields.

Imported LNG is higher cost and higher emissions. It will undermine domestic energy security by exposing Australia’s energy market to global supply chains and prices. Higher gas prices will also inevitably flow through to electricity markets, given the role of gas powered generation in the National Electricity Market.

Australia has the domestic gas available to deliver a more affordable and lower emissions energy system. We must prioritise unlocking Australian domestic gas. 

¹ Australian Government, Australia’s Energy Commodity Resources 2024 – Gas, https://www.ga.gov.au/aecr2024/gas

² Australian Government, Beetaloo gas resources, Beetaloo gas resources | Beetaloo Strategic Basin Plan | Department of Industry Science and Resources

³ AEMO, Victorian Gas Planning Report, March 2025, p6

⁴ https://www.industry.gov.au/publications/future-gas-strategy

⁵ Argus Media, Asian LNG spot price averages, 13 November 2024 - 12 February 2025

⁶ https://www.apa.com.au/news/asx-and-media-releases/new-frontier-economics-research-shows-imported-lng-will-be-significantly-more-expensive-than-domestic-gas (research commissioned by APA)