The Australian Competition and Consumer Commission (ACCC) predicted that gas supply in the East Coast gas market could fall short by 9 petajoules from July to September if liquefied natural gas (LNG) producers export all their uncontracted gas, the regulator said in a statement Thursday.

The July to September quarter includes winter months, and it usually sees the highest domestic demand for gas due to colder temperatures. The ACCC recommended that the Australian Government work with LNG producers to secure additional gas, which is currently uncommitted, for the domestic market.

The ACCC's short-term update indicated the supply-demand forecast dropped by 22 PJs since the December 2024 quarter due to a fall in production and increased exports.

In Australia's southern states, the supply shortfall could reach a historic high of 40 PJs for the quarter, twice that of the same period in 2024. The regulator projects that the gap will be able to be met by transporting about 30 PJs of surplus gas from Queensland and drawing on southern state gas stores for about 10 PJs.

However, without access to the LNG producers' surplus gas, there is "very little buffer for unexpected events, including extreme weather, higher than allowed-for demand, or higher than usual outages in coal-fired power stations," ACCC Commissioner Anna Brakey said.

Australia's Resources Minister Madeleine King said the government took action to secure additional supply commitments from gas exporters for the third quarter under the current heads of agreement, with producers committing to make an additional 9 PJs of gas available for the domestic market.

The government will not activate the Australian Domestic Gas Security Mechanism for the quarter, noting that there are sufficient mitigations to address risks for supply-demand balance for the East Coast gas market and the Western Australian gas market.

The ACCC highlighted the need for a bigger buffer to manage downside risks, noting the importance of sufficient storage in the southern states in averting a shortfall.