Australia Runs the Risk of Gas Shortfall by 2027, Watchdog Says

Australia, one of the world’s largest liquefied natural gas shippers, faces a shortage within a little more than two years, according to an independent inquiry, which urged a boost to production to meet the challenge of rising demand.

Shortfalls could emerge for the populous east coast from 2027, a year earlier than expected, the Australian Competition and Consumer Commission said in an interim report. That could require supplies that are normally allocated to the spot market to be redirected to local consumers, it warned.

Australia is one of the world’s biggest commodity producers, rich in resources from gold and iron ore to vast troves of offshore gas, yet the nation faces a challenge balancing local energy needs against servicing overseas markets. The country still ranks among the largest exporters of LNG even after losing top spot to the US and Qatar in recent years.

“Long-term solutions to gas market shortfalls will require a range of policy and market responses,” the interim report said. “Amongst these, there is an urgent need to develop new sources of gas production and supply.”

At present, LNG produced from offshore gas fields in northern Australia, as well as onshore coal seam gas fields in Queensland, is mainly shipped to Japan, China, Taiwan, and South Korea.