Media Release
7 March 2026
Any reservations?
The east coast gas industry received a rather unwelcome Christmas present in 2025, with the Australian Government’s 22 December 2025 announcement that it would introduce a domestic gas reservation. However, EnergyQuest analysis suggests that there may not be much gas available to reserve until the 2030s if the government adheres to its stated design principle of respecting existing contracts. Notwithstanding the government’s apparent expectation that the policy will create a small oversupply and place downward pressure on prices, the gap between expectations and reality may point to a change in approach before the policy is finalised, or in coming years if price and supply do not meet government expectations.
Iran war
The war with Iran has seen the closure of the Straits of Hormuz, removing approximately 20% of the world’s oil and LNG supply. Restricted LNG capacity and feedstock mean Australia has limited options to take advantage of global LNG shortfalls.
When the Iran war broke out, north Asian LNG (JKM) and European (TTF) prices increased by 44% and 54% respectively (from 27 February to 5 March), whereas the Queensland gas spot market (WGSH) decreased by 23% – proving once again that domestic factors are the critical determinant for Australia’s domestic gas prices.
Domestic markets
East coast gas-fired power generation demand fell sharply, by 30% in Q4 2025 compared to Q4 2024 (qoq), contributing to a broader decline in domestic gas use despite modest increases in industrial consumption. Storage levels remain below historical norms, with Iona reaching its lowest winter levels since 2019 and reducing system flexibility heading into the critical peak winter periods.
At the same time, renewable generation set new milestones: variable renewables supplied more than 50% of NEM demand for the first time, driven by strong growth in wind, solar farms, and rooftop PV, supported by record household battery uptake under national incentives. These shifts contributed to a substantial fall in wholesale electricity prices, down 44% qoq to $50/MWh.
Exploration activity continues its resurgence, with Q4 2025 recording a ten‑year high in quarterly expenditure, fuelled by renewed momentum in the Otway Basin and Taroom Trough.
Key Statistics
- National 2025 petroleum production decreased to its lowest level since 2018 due to a five-year low in LNG shipments and the lowest oil and liquids production since 2018.
- The Australian LNG industry shipped 76.4 Mt in 2025 – the lowest calendar year result since 2020 and ranking the country unambiguously behind Qatar and the US in the global league table of LNG producers.
- In Q4 2025, LNG export revenue decreased to $14.4 billion, down from $17.5 billion in Q4 2024, reflecting lower average prices and shipments, with the latter down by 1.2 Mt qoq.
- Short-term east coast gas prices averaged at $12.68/GJ in Q4 2025 (-7.2% qoq) but were similar to last quarter (Q3 2025).
Attributions and Media Contact:
Rick Wilkinson
Chief Executive Officer
EnergyQuest
Mobile: +61 (0) 7 3870 9152
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