A new report from EnergyQuest suggests that new approvals and strong policy backing from key states are helping to bolster confidence in east coast gas, despite record low east coast gas demand in Q1.
In the report, EnergyQuest said it detects a cautious optimism creeping back into the industry.
Western Australia, the Northern Territory, South Australia and Queensland have been consistent and long-term supporters of the sector, forming what EnergyQuest describes as a ‘coalition of the willing’.
These states, through consistent policy settings and support, do not have anything like the gas shortage issues facing Victoria and New South Wales.
Encouragingly, the report found signs of growing openness to gas on the east coast. It pointed to Victoria delivering a long-awaited approval for the Viva Energy LNG regasification project at Geelong; and Santos securing a win for its long-delayed Narrabri project, with the National Native Title Tribunal allowing the NSW Government to grant the required petroleum production leases.
Despite these positive developments, the report notes that national petroleum production dropped faster in Q1 2025, quarter on quarter (qoq), than any time since 2011 – reaching a five-year low.
Domestic gas demand on the east coast also hit the lowest quarterly level EnergyQuest has on record.
National LNG export revenue decreased to $16.1 billion in Q1 2025, down 11 per cent from $18.1 billion in Q1 2024. The drop was attributed to both lower average prices and shipments.
Other market movements included:
- The value of national LPG production in Q1 2025 dropped 20.7 per cent to $654 million, of which 13.4 per cent was volume related
- EnergyQuest estimates the value of national condensate production to be $2.09 billion, down 29.7 per cent, of which 17.3 per cent was volume related
However, despite the challenges, EnergyQuest highlighted Australia’s continued strength in the global market.
In 2024, Australia was the world’s second largest LNG exporter and, contrary to what EnergyQuest described as “loose ‘facts’ floating around,” Australia still has some of the lowest gas prices in the developed world.
While North America remains cheaper due to shale gas, few other developed nations outperform Australia on price.