Australian Gas Now Has Two Prices

Gas on the east coast is selling for around $11 to $13 a gigajoule. If the same gas were shipped to Asia as LNG, the ACCC's measure of what a producer could expect to receive was $30.24 a gigajoule for October. I think that gap is one of the odder features of the Australian economy at the moment, and it is getting more attention because a bill to reserve gas for local buyers is now before the Senate.

The two numbers

AEMO's latest quarterly report shows east coast wholesale gas averaged $10.77 a gigajoule in the September quarter. That was 15 per cent lower than a year earlier, even though international LNG prices stayed much higher because of supply risks from the Middle East conflict. In the week to 25 October, Brisbane's spot market averaged $12.40.

The export side is tracked by the ACCC through what it calls the LNG netback price: the price an exporter could get in Asia, less the cost of turning gas into LNG and shipping it. At its 16 October update, the October figure was $30.24, forward prices for December and January were above $36, and the forward average for 2027 was $28.64.

Contracts look more like the local number than the export one. The ACCC's September gas inquiry report found that average prices under long term contracts for 2027 and 2028 supply held at around $12 to $13 a gigajoule through the first half of this year. Buyers contracted 51 petajoules for 2027 supply in that period, more than double the volume a year earlier, and most new agreements struck between April and June were at fixed prices rather than linked to international markets.

Why local prices have held

In 2022 the last global energy shock pushed east coast prices up sharply. The ACCC said in July that conditions this time are different. In 2022, global disruption arrived at the same time as high local demand, depleted storage and supply constraints. This year a warm winter kept demand down, and storage was in better shape.

Supply looks adequate in the short term. The ACCC's September report forecast a small surplus for the March quarter of 2027, and on 9 October the Resources Minister announced that the formal process for considering export restrictions would not be started for that quarter. Winter is tighter. The ACCC expects southern production to fall short of southern demand by 64 petajoules between April and September 2027, with the gap filled by gas from Queensland and from storage.

The reservation bill

The Domestic Gas Reservation Bill 2026 was introduced on 14 October. From 1 January 2028, LNG exporters would need an export licence and would have to supply up to 20 per cent of their exports to the domestic market. The Australian Energy Regulator can set a lower obligation based on forecast demand plus a buffer of about 10 per cent. Contracts signed on or before 22 December 2025 are respected. A Senate committee is due to report by 11 November.

Opinion on the bill is divided. The Parliamentary Library's digest notes that stakeholders have raised significant concerns and that many experts think the scheme could discourage investment in new supply and may not lower domestic prices. At the committee hearing on 23 October, the gas industry's main lobby group said producers should not be forced to sell into the domestic market, let alone to create a 10 per cent oversupply, while one policy analyst said a buffer of 2 to 5 per cent of demand would be more appropriate. Because existing export contracts are respected and only start expiring from 2031, the digest also cites a view that the scheme will capture a modest volume of gas at first.

The Queensland angle

Queensland is where the gap is most visible. Queensland LNG exports reached their highest September quarter on record, up 16 petajoules on a year earlier, while Queensland's domestic supply fell 24 petajoules. For the first September quarter since 2016, gas flowed north on average from Moomba into Queensland. Around three quarters of Australia's gas is exported, so small changes in export volumes make a real difference to what is left for local users.

Why it matters for property and business

Gas supplies about a quarter of Australia's domestic energy use, and it matters most to manufacturers and other businesses that use it for heat or processing. For them, the difference between $12 and $30 a gigajoule is large.

My own view is that I would not treat today's local gas price as fixed. It has held up well through a severe global shock, but the incentive for producers to export is strong while the gap stays this wide, and southern supply next winter is tight. For anyone whose business or project relies on energy heavy inputs, I think it makes sense to know when supply contracts roll over and to keep energy cost assumptions in a feasibility study or business plan under regular review, whatever happens to the bill.

What I am watching

I will be watching the Senate committee's report on 11 November and whether the bill passes in its current form. I will also watch the ACCC's next gas inquiry report in December, how quickly southern storage refills over summer, and whether the export price eases as forward prices suggest it may during 2027 and 2028.

None of this is a recommendation to borrow, lend, invest or sell. Everyone's position is different.

Sources

AEMO, Warmer weather, solar and batteries reshape energy markets (23 Oct 2026)

AEMO, Quarterly Energy Dynamics Q3 2026

ACCC, LNG netback price series (updated 16 Oct 2026)

ACCC, More gas contracted under long term agreements as prices remain stable (9 Oct 2026)

ACCC, East coast gas market to be well supplied in Q4 2026 (10 Jul 2026)

Department of Industry, Science and Resources, Gas supply and demand outlook for 2027 quarter 1 (9 Oct 2026)

DCCEEW, Gas Market Review and reforms

Parliamentary Library, Bills Digest on the Domestic Gas Reservation Bill 2026 (23 Oct 2026)

AAP, Sparse support for gas changes at Senate inquiry (23 Oct 2026)

Energy and Management Services, East Coast Gas Report, week ending 25 Oct 2026

Personal views, not financial advice.