We must move quickly to deliver a well-designed gas reservation for the east coast

Energy transition

Gas

4 min read

Written by

Adam Watson

Published on

14 April 2026

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During the past year we’ve seen positive progress in the outlook for our east coast gas market. The delivery of the Gas Market Review Final Report and ongoing consultation for the implementation of a domestic gas reservation scheme, are important developments, but we are not yet at the finish line.

We need to ensure the Federal Government closes this out quickly and delivers an effective domestic gas reservation for the east coast. This provides certainty for customers, consumers and the wider energy industry and ensures reliable and affordable domestic gas remains available to power our economy.

The certainty provided by the Government’s Final Report - that our government supports Australia's domestic gas supply market and favours a domestic solution to meet demand - supports investment where it is needed.

In late February APA announced approximately a $500 million investment to address bottlenecks in our east coast gas network. This investment is critical for Australian businesses and consumers.

It addresses supply shortfalls projected for Australia's southern states later this decade.

Policymakers' decisions do not completely mitigate risk, but that’s ok. We are comfortable with some risk and want to get on with the job. We know customer demand is there, and the government is sending the right signals to the market.

Like any investment, we need to ensure the runway lights are on so that when we take off, we have a line of sight to where we are heading and where we think we will land.

The Gas Market Review Final Report turned on the runway lights, enabling the investment. The Final Report also builds on the Government’s 2024 Future Gas Strategy, recognising the critical role that gas plays in our economy.

We know that domestic gas supply isn't a constraint. More than 71,000 petajoules of 2P reserves and 2C resources are available in eastern Australia to serve an east coast domestic market that consumes around 500 petajoules each year.

Add to that around a thousand petajoules a year for exported LNG - Australia has enough gas under its feet to deliver energy security, independence and economic prosperity for the next 45 years.

The 2026 Gas Statement of Opportunities or GSOO recognised the important role that ongoing infrastructure expansion plays in meeting gas demand in southern states, noting APA’s $500 million Stage 3 East Coast Gas Grid Expansion.

The East Coast Gas Grid Expansion Plan Stage 3A will increase north-to-south capacity by 11%, including a 20% increase in capacity for northern gas into Victoria and will be completed by winter 2028.

When combined with Stage 3B, the expansion will deliver a 30% increase in overall north to south gas transport capacity.

The GSOO also highlighted that further investment will be needed to address emerging supply gaps from 2030 as production from legacy fields in southern markets continues to decline. APA is committed to building on this, provided the regulatory and policy frameworks for domestic gas supply are conducive.

A well-designed east coast gas reservation will be central to ensuring these gaps are addressed in a reliable and affordable way. West Australia provides a clear-cut example of the benefits of a reservation scheme, which has been in place since 2006.

In the past three months, WA gas prices averaged around $5.91 per gigajoule while Victoria’s gas price has been $10.47 per gigajoule during the same period.

Looking back further, gas prices in WA have been, on average, 50% lower than gas prices in Victoria over the past 5 years.

Closing out the east coast reservation scheme will be a significant step towards restoring the market confidence required for investment in gas infrastructure in Australia.

Additionally, recent instability in the Middle East highlights the vulnerability of global energy markets, supply chains and underscores the need to double down on Australia's abundant gas supplies and deliver the infrastructure required to support long-term energy security and independence.

Like the broader domestic gas market, APA is ready to move forward to deliver what’s required for a reliable and affordable gas market. We are playing our role in ensuring Australia maintains energy independence – that is, securing Australia’s energy future!