Australia Natural Gas Market Size, Share Analysis and Forecast Report 2024-2032

Australia Natural Gas Market Trends

The Australia natural gas market plays a crucial role in driving the nation’s economic growth by powering key industries and supporting overall development. It also creates numerous jobs across exploration, extraction, and distribution, while enhancing energy security by reducing dependency on imported energy. Compared to coal, natural gas is a cleaner energy source, emitting fewer greenhouse gases, and ensures a stable and reliable power supply for both residential and industrial sectors. In April 2024, the Australian Energy Market Operator (AEMO) launched a new strategic plan focusing on natural gas as a backup for renewable sources. The plan aims to strengthen infrastructure and storage to meet the growing demand in domestic and export markets.

Opportunities in the Australia natural gas market are strengthened by its role in manufacturing, where it boosts energy efficiency and lowers operational costs. Additionally, Australia’s status as a major LNG exporter amplifies its influence in global markets. Moreover, natural gas lowers energy costs for households and businesses. Its flexibility allows it to complement renewable energy by providing backup power during intermittent supply. Continued investment in gas infrastructure is vital for both regional and national economic growth. In March 2024, Queensland's Department of Energy approved a 200-kilometre natural gas pipeline project to expand supply capacity to rural areas, connecting them to the state’s major gas network and improving energy access for local industries and households.

Australia Natural Gas Market Growth

The Australia natural gas market revenue is boosted as it stimulates growth in rural and regional areas by promoting economic activity and supporting infrastructure development. Through LNG exports, Australia strengthens its geopolitical influence and reinforces its role in the global energy market. The expanding sector attracts significant investment, spurring innovation and supporting Australia’s transition to a low-carbon energy future. It also diversifies the national energy mix, reducing dependence on a single energy source. According to the Australian Bureau of Statistics, natural gas export revenue increased by 10% in 2023, reaching AUD 90 billion, driven by growing demand from Asia, particularly China and Japan.

The growth of Australia natural gas market is further supported by its cleaner energy profile compared to more carbon-intensive fuels, helping to lower greenhouse gas emissions. Additionally, it serves as an alternative fuel for transportation, reducing fuel costs. Gas production also creates infrastructure and economic opportunities for local communities. Moreover, LNG exports contribute to Australia’s trade surplus, and domestic production mitigates exposure to global price volatility, ensuring a stable energy supply. Woodside Energy, in February 2024, announced a new project to boost natural gas output from the Scarborough Field off Western Australia, aiming to meet growing demand for LNG exports to Asia.

Australia Natural Gas Market Insights

• In 2022, Australia produced 3.5 trillion cubic feet (Tcf) of natural gas, as reported by the Australian Energy Statistics, 2022.
• In 2022, Australia became the world’s leading exporter of liquefied natural gas (LNG), with exports valued at AUD 87.9 billion, according to the *Department of Industry, Science, Energy and Resources.
• Australia’s proven natural gas reserves are estimated at 144,000 billion cubic feet (Bcf), with the majority found offshore, as per the Australian Energy Resource Assessment 2022.
• The natural gas market in Victoria is expected to experience substantial growth, with a projected CAGR of 25.2% between 2024 and 2032.

Industry News

November 2023

Santos Ltd. confirmed the successful completion of its Barossa gas project in the Northern Territory. The project, designed to supply LNG to Asian markets, is projected to contribute AUD 3 billion annually to the Australian economy.

September 2022

Chevron Australia revealed plans to expand its natural gas operations at the Gorgon LNG project. The expansion will include the construction of a new liquefaction facility, boosting output to 15 million tonnes per year, as reported by the Department of Industry, Science, Energy and Resources.

Australia Natural Gas Market Drivers

Increasing Demand for LNG Exports

The demand for Liquefied Natural Gas (LNG) exports is a key trend of Australia natural gas market. With global markets, particularly in Asia, seeking cleaner energy alternatives, Australia’s vast natural gas reserves position it as a major supplier. LNG exports play a crucial role in Australia's trade surplus, reinforcing its standing in the global energy market. Investment in LNG infrastructure, including export terminals, is on the rise, enabling the country to meet growing demand. The growing use of LNG as a transition fuel, complementing renewable energy sources, further enhances its contribution to the global shift towards low-carbon energy. In October 2023, The Australian Natural Gas Industry Association (ANGIA) warned of a potential gas supply shortage and urged the government to expedite approvals for new exploration projects. ANGIA’s report raised concerns that declining local production could impact both domestic energy prices and LNG export commitments by 2025.

Shift Towards Cleaner Energy Solutions

The growth of the Australia natural gas market is increasingly recognised as it is a cleaner alternative to more carbon-intensive fossil fuels, playing a vital role in the country's energy transition. As Australia strives for decarbonisation, natural gas helps reduce overall greenhouse gas emissions. It is considered a "bridge fuel," complementing renewable energy sources such as solar and wind by providing reliable backup power. The Australian government has implemented policies to foster investments in cleaner energy, with natural gas being part of a diverse energy mix. This trend aligns with global efforts towards cleaner energy and supports Australia’s long-term sustainability goals for its energy sector. In May 2023, The Australian Government introduced a new policy aimed at reducing dependence on fossil fuels by investing in carbon capture technologies for natural gas production. The Department of Industry, Science, Energy and Resources confirmed that this initiative will help Australia meet its emission reduction targets by 2030.

Opportunities in the Australia Natural Gas Market

Growing Role of Natural Gas in Transport

The Australia natural gas market dynamics and trends are shaped by its growing use as a cleaner and more cost-efficient fuel alternative in the transport sector. As concerns about emissions rise, natural gas-powered vehicles (NGVs) are gaining popularity, particularly in heavy-duty transport, including buses and trucks. This trend aligns with Australia's efforts to cut carbon emissions in the transport sector while reducing fuel costs for both businesses and consumers. The expansion of natural gas refuelling infrastructure, particularly in urban and regional centres, is meeting this growing demand. As governments and industries invest in NGVs and refuelling infrastructure, natural gas is positioned as a key contributor to the decarbonisation of Australia’s transport system. In April 2024, The ACT Government launched a pilot project for natural gas-powered taxis in Canberra. The initiative, supported by the Department of Environment, Climate Action, and Transport, aims to cut emissions from the transport sector by converting 20 taxis to compressed natural gas (CNG), with plans for further expansion.

Market Restraints

The Australia natural gas market faces several key constraints. Price volatility, driven by global events and supply-demand imbalances, leads to instability, impacting both consumers and businesses. Environmental concerns over emissions and the push for renewable energy challenge the industry's long-term sustainability. Regulatory uncertainty, with changing policies on emissions and exploration rights, creates instability for investors.

Infrastructure development also faces delays and high costs, particularly in pipelines and LNG export terminals. Additionally, competition from growing renewable energy sources further reduces demand for gas. Public and political opposition to fossil fuels, including fracking, poses a barrier, while reliance on LNG exports exposes the market to global demand fluctuations, especially from Asia.

Australia Natural Gas Industry Segmentation

“Australia Natural Gas Market Report and Forecast 2024-2032” offers a detailed analysis of the market based on the following segments:

Market Breakup by Type

• Ethane
• Methane
• Propane
• Others

Market Breakup by Source

• Conventional Gas
• Unconventional Gas

Market Breakup by Application

• Residential
• Commercial
• Industrial

Market Breakup by Region

• New South Wales
• Victoria
• Queensland
• Australian Capital Territory
• Western Australia
• Others

Australia Natural Gas Market Share

By Type Insights

According to the Australia natural gas market analysis, methane, the main component of natural gas, is a highly efficient and clean-burning fuel. Methane is projected to grow at a CAGR of 4.7% from 2024 to 2032. It emits fewer carbon emissions compared to coal and oil, positioning it as a key element in Australia's shift towards cleaner energy. Methane is widely used in power generation, heating, and as a feedstock in various industries. In February 2024, the Australian Energy Regulator (AER) introduced new regulations to address methane emissions from natural gas producers, focusing on reducing methane leaks in gas fields with strict reporting and accountability.

The Australia natural gas market growth is driven by propane, a versatile and low-emission fuel. It is widely used in remote and rural areas for heating, cooking, and powering vehicles. The propane segment is projected to expand at a CAGR of 4.6% from 2024 to 2032. It provides a dependable energy source for households and businesses in areas without access to natural gas infrastructure. Propane also supports Australia's energy diversification goals and contributes to reducing carbon emissions. In December 2023, Elgas announced the expansion of its propane distribution network in rural Victoria, aiming to enhance the availability of propane for heating and cooking in off-grid areas, thus decreasing reliance on more polluting fuels like kerosene.

By Source Analysis

According to the Australia natural gas market report, conventional gas, extracted from traditional reservoirs, remains a key energy source in the country. It offers a reliable, stable supply, supporting energy security and industrial activity while being more cost-effective to extract than unconventional gas sources. Conventional gas is heavily used in power generation, heating, and industrial applications, helping to reduce reliance on coal. In February 2024, Beach Energy launched a new conventional gas development project in the Otway chevron, Victoria, which is set to boost natural gas production and enhance energy security while supporting emission reduction efforts.

The growth of the Australia natural gas market is also driven by unconventional gas, including shale, coal seam gas (CSG), and tight gas, which hold significant potential for expanding energy supply. These sources can meet rising domestic and export demand, create economic opportunities in regional areas, and help reduce carbon emissions by replacing coal and oil. In August 2023, Senex Energy began production at its new CSG development in the Surat Basin, which will greatly increase Queensland's natural gas output, supporting both domestic energy needs and LNG exports, and contributing to Australia’s strategy to meet growing energy demands.

By Application Insights

As per the Australia natural gas market report, the residential sector is growing as it provides households with an affordable, reliable, and efficient energy source for heating, cooking, and hot water. The residential segment is projected to expand at a CAGR of 4.5% from 2024 to 2032. Compared to coal, natural gas emits fewer carbon emissions, and its widespread availability ensures a consistent supply. As a clean and cost-effective energy alternative, it also helps reduce household energy bills. In January 2024, EnergyAustralia launched a new residential gas subscription model, offering customers fixed-rate billing to provide greater affordability and predictability amidst fluctuating energy prices.

The industrial sector in Australia natural gas market is experiencing growth, as natural gas serves as a key, cost-effective energy source for manufacturing, processing, and power generation. This sector is projected to expand at a CAGR of 4.8% from 2024 to 2032. It enhances operational efficiency, reduces carbon emissions, and lowers energy costs. Industries utilising natural gas benefit from its reliability, flexibility, and scalability, which boost productivity and support Australia's global competitiveness. In April 2023, Santos Ltd. announced a new natural gas supply agreement with Australian manufacturers, ensuring a stable supply for large-scale industrial use and driving energy efficiency in sectors like cement, steel, and chemicals.

Australia Natural Gas Market Regional Insights

New South Wales Natural Gas Market Overview

New South Wales is experiencing a growing demand for natural gas across residential, industrial, and power generation sectors, which is supporting economic expansion while aiding in the reduction of carbon emissions through cleaner energy sources. NSW is projected to expand at a CAGR of 4.6% from 2024 to 2032. The state meets its natural gas needs through both local production and imports. In 2023, natural gas consumption totalled 16.2 bcm, primarily supplied via pipelines for residential and industrial use, according to the Australian Energy Statistics, 2023.

Queensland Natural Gas Market Trends

Queensland is projected to expand at a CAGR of 4.9% from 2024 to 2032. Queensland's natural gas sector benefits from significant production levels and a strong LNG export market. The state is a vital contributor to global energy supply, particularly to Asia, supporting both local economic growth and international energy trade. In 2023, natural gas production reached 26.4 bcm, with LNG exports playing a key role in Australia's broader energy strategy, as reported by the Australian Energy Regulator, 2023.

Western Australia Natural Gas Market Dynamics

According to Australia natural gas industry analysis, Western Australia, with its vast natural gas reserves, is a leading producer and LNG exporter, crucial to both domestic energy security and international markets. The natural gas sector also stimulates regional economic development and job creation. In 2023, natural gas usage amounted to 23.9 bcm, covering power generation, industrial demands, and exports to global markets, according to the Department of Industry, Science, Energy and Resources, 2023.

Competitive Landscape

The Australia oil and gas market key players focus on the production of liquefied natural gas (LNG), oil exploration, and offshore energy projects. They manage several substantial assets, some of which are among the largest in the country and are dedicated to sustainable energy practices. This includes investing in carbon capture and storage (CCS) technologies and implementing measures to reduce emissions. These companies play a crucial role in meeting Australia’s energy needs while aiding the transition to a lower-carbon future.

Key Industry Players

Shell Plc: Established in 1907, Shell Plc is a global energy company headquartered in The Hague, Netherlands. It is a leader in the oil and gas industry, with operations spanning exploration, production, refining, and renewable energy. Shell focuses on driving the transition to cleaner energy and sustainability worldwide.

Exxon Mobil Corp.: Founded in 1870 and headquartered in Irving, Texas, Exxon Mobil Corp. is one of the world’s largest publicly traded oil and gas companies. It operates in all areas of the energy sector, including exploration, refining, and chemicals, and is actively investing in technologies for carbon reduction and alternative energy sources.

Woodside Energy Group Ltd.: Established in 1954 and is based in Perth, Australia. The company is a major oil and gas producer, focused on liquefied natural gas (LNG) and other energy projects. Woodside is committed to sustainable practices and the transition to cleaner energy solutions.

Santos Ltd.: Founded in 1954, Santos Ltd. is an Australian energy company headquartered in Adelaide. The company is a leading producer of natural gas and oil, with operations across Australia and Papua New Guinea. Santos is focused on providing reliable energy while reducing emissions and investing in low-carbon technologies.

Other key players in the Australian natural gas market report are Chevron Australia Pty Ltd., Origin Energy Ltd., Beach Energy Ltd., and INPEX Holdings Australia Pty Ltd., among others.

Recent Developments

July 2024

Inpex Corporation unveiled a new natural gas project in the Browse Basin, off Western Australia. This initiative aims to substantially boost the company’s LNG exports to international markets, while also adopting sustainable production practices, such as carbon offset programmes and energy-efficient technologies to minimise environmental impact.

May 2023

Chevron Australia initiated a new offshore natural gas field development in the Carnarvon Basin, marking a key milestone in expanding Australia’s natural gas export capacity. The project is set to provide a cleaner energy source, with plans to incorporate carbon reduction technologies throughout the production process.