Australian LNG producers may need to commit more gas to local market amid potential supply shortage
SYDNEY, Sept 27 (Reuters) - Australian liquefied natural gas (LNG) producers may need to commit extra gas to the domestic market instead of exports due to a drop in the supply forecast for next year, the competition watchdog said on Friday.
The LNG supply surplus in Australia's main east coast gas market is forecast to shrink to between 12 and 27 petajoules (PJ) in the first quarter of 2025, down from the 26 to 35 PJ forecast in June, according to a quarterly report from the Australian Competition and Consumer Commission.
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The smaller forecast is due an increase in contracted exports in the September quarter. Australia was the world's largest LNG exporter until overtaken by the U.S. last year.
If producers continue to export un-contracted gas, there is a risk there will be insufficient gas to refill a key storage facility or provide a buffer against an unexpected drop in production or spike in demand, the report said.
"LNG producers may need to commit uncontracted gas to the east coast market in early 2025 to mitigate the risk of a domestic gas shortfall during the year," ACCC Commissioner Anna Brakey said in a statement.
Brakey said producers should consider the updated east coast supply outlook before increasing exports or changing cargo schedules.
LNG producers currently expect to have 15 PJ of uncontracted gas in the first quarter of 2025. Up to 15 PJ of gas is needed before May 2025 to refill the key storage facility of Iona in Victoria.
(Reporting by Lewis Jackson; editing by David Evans)