Eastern Australia Gas Demand Falls 6% Amid Ongoing LNG Export Growth

Gas consumption in eastern Australia has continued to fall, according to new data from the Institute for Energy Economics and Financial Analysis (IEEFA). In FY2025-26, total gas consumption excluding the LNG sector was 6% lower than in calendar year 2024. The rate of demand decline is slowing down in residential, commercial, and industrial sectors, but it's increasing in the electricity sector.

The LNG export sector is the only one showing net growth in gas demand since FY2022-23. In contrast, domestic consumption has decreased, and domestic gas supply has also fallen from 231PJ to 214PJ year on year, a drop of over 7%. The domestic market now accounts for just 23% of domestic gas production, down from 25% a year earlier.

The decline in demand is part of a longer trend that began in FY2014-15 when LNG exports started from Queensland. Several factors have affected both gas supply dynamics and pricing, including the start-up of the Queensland LNG export sector, which increased east coast gas demand several times over. Exporters like Santos's Gladstone LNG (GLNG) contracted gas from South Australia's Moomba basin that previously went to the domestic market.

As a result, government policy has been implemented to support and drive electrification, particularly in Victoria, which has contributed to falls in gas consumption by households and small commercial users. The Australian government is designing a reservation policy to ensure sufficient domestic supply and put downward pressure on prices.