Tuesday, 8 September 2026

Eastern Australia burned 6% less gas in FY2025-26 than in calendar year 2024 once the LNG sector is stripped out, IEEFA reported. The institute attributes a fall of more than 24PJ in gas demand for power generation over a single year to more electricity coming from grid-scale battery storage.

Production available to local buyers shrank alongside consumption. Year on year for the first half, IEEFA put domestic supply at 214PJ against 231PJ previously, a contraction exceeding 7%.

Local buyers are also taking a thinner slice of what the region produces. IEEFA calculated the domestic market's share of domestic gas production at 23% in the first half, against 25% twelve months before, and described that as the weakest reading since at least 2019.

Queensland's export flows over the same half-year came to nearly 645PJ, with a further 61PJ consumed by exporters to operate their facilities, IEEFA said.

One export venture accounts for a long-running draw on local molecules. Since 2017, GLNG has, in IEEFA's word, "siphoned" more than 1000PJ out of the domestic market, a volume the institute equates to over two years of domestic demand.

The Australian federal government is drafting a gas reservation policy aimed at securing adequate domestic supply and pushing prices down. That work is under way while both domestic consumption and domestic supply contract and the domestic call on production sits at its lowest share in the period IEEFA examined.

The generation number matters most for anyone sizing future domestic gas need. IEEFA ties the 24PJ reduction directly to battery output replacing gas-fired supply.

Multi-decade LNG contracts signed on the back of a geopolitical price spike carry a bull-trap risk for Canadian investors, IEEFA analyst Mark Kalegha argues, because the underlying demand shift the deals assume has not been established.

Kalegha cautioned against "locking capital into 20- and 30-year deals" built on the premise that structural change is under way rather than short-term volatility.

The price move traces to the Strait of Hormuz closure, which held up almost 20% of the world's LNG shipments and lifted spot prices to a level not seen in more than three years, according to IEEFA.

IEEFA expects global LNG supplies to rise more than 40% by 2032, despite that disruption. Liquefaction capacity is already being built out across six producer countries: Canada, the U.S., Russia, Mozambique, Nigeria, and Mexico.

On the demand side, IEEFA cites two data points. Electric vehicle sales set records in 37 countries in April. Chinese solar exports, already at record levels before the U.S.-Israel-Iran conflict, have doubled since the war started.

Canada is expanding clean power output, including volumes destined for export, and IEEFA points to the $36 billion agreement between Hydro-Quebec and Newfoundland and Labrador as evidence of where domestic energy capital is going.

Kalegha flags the Canada Investment Summit in Toronto, set for September 14-15, as the next occasion to assess where the global gas market stands.