East coast gas prices fell to their lowest quarterly average since 2021 despite elevated international LNG prices, according to the Australian Energy Market Operator (AEMO).
AEMO’s latest Quarterly Energy Dynamics report found east coast gas prices averaged $9.08/GJ in the June quarter, down from $12.36/GJ a year earlier and less than half the LNG netback price of $20.84/GJ.
The figures reinforce that a well-supplied domestic market is helping keep Australian gas prices low and stable despite volatility in international energy markets, as the Federal Government finalises its proposed gas reservation framework.
Australian Energy Producers Chief Executive Samantha McCulloch said the Government should ensure the reservation scheme builds on these strong market conditions by supporting investment in new supply.
“East coast gas prices are already at their lowest quarterly level in five years, demonstrating what a well-supplied domestic market can deliver for Australian households, businesses and manufacturers,” Ms McCulloch said.
“The Government’s reservation framework should build on this by encouraging the new investment and supply needed to keep downward pressure on prices as existing gas fields decline.
“Forcing a structural oversupply into the market risks undermining investment and ultimately working against the objective of keeping gas prices affordable over the long term.
“The focus must be on timely development of new gas supply and ensuring Australia remains an attractive place to invest in the projects we will need in the years ahead.”
The report highlighted the critical role of gas-fired generation in supporting the electricity system during periods of low renewable output, reaching its highest daily average of 3,328 MW on 22 June during an extended period of low wind across southern states.
“Gas-fired generation will play an increasingly important role in backing up a growing share of renewables and as coal-fired generation retires. The AEMO report is yet another reminder that continued investment in new gas supply and infrastructure is essential,” Ms McCulloch said
