Natural Gas Industry Analysis in Australia

Demand Outlook of Natural Gas in Australia (2024 to 2034)

The natural gas industry in Australia is estimated to be valued at US$ 24,563.5 million in 2024. Projections indicate a steady expansion with a CAGR of 2.8% through 2034. Anticipated growth is set to propel the industry to an impressive size of US$ 33,943.1 million by 2034.

Australia is a major global player in LNG exports, with multiple operational projects and ongoing developments. Significant domestic production serves both local consumption and export demands.

Australia primarily exports LNG to key markets in Asia, including Japan, China, South Korea, and other Asia-Pacific countries. Natural gas is used extensively for electricity generation, industrial processes, and residential purposes. Advancements in extraction technologies and potential developments in carbon capture and storage may shape the industry's future.

Natural gas is perceived as a cleaner alternative to some other fossil fuels, driving its demand in areas where environmental concerns and regulations push for cleaner energy sources.

The demand for natural gas in Australia is forecasted to grow steadily at a CAGR of 2.8% from 2024 to 2034. This growth trajectory is propelled by sustained domestic consumption, expanding usage of natural gas in power generation, and rising needs in vital industries like chemicals, fertilizers, and transportation.

Additionally, the push towards cleaner energy alternatives and stricter environmental regulations will significantly boost natural gas demand, especially within the transportation and industrial sectors.

Key Industrial Growth Drivers

• Increasing demand in power generation.
• The growing demand for sustainable energy sources in Australia
• The growth of the chemical and manufacturing industries in the country
• The growing use of natural gas in the production of fertilizers is another key driver.

Report Attributes	Details
Estimated Industry Value (2024E)	US$ 24,563.5 million
Forecasted Industry Value (2034F)	US$ 33,943.1 million
Global Industry Growth Rate (2024 to 2034)	2.8% CAGR
Unconventional Gas segment Growth Rate (2024 to 2034)	2.6% CAGR
Automotive Fuel Segment Growth Rate (2024 to 2034)	3.8% CAGR
Key Companies Profiled	Woodside Energy Group Ltd Santos Ltd Beach Energy Limited Origin Energy Limited Chesapeake Energy Hess Corporation AGL Energy Ltd SM Energy Company ExxonMobil Corporation TotalEnergies

Which Factors Are Driving The Demand For Natural Gas In Australia?

Increasing Demand for Cleaner Energy Sources Presents a Significant Opportunity for Australia's Natural Gas Industry

Natural gas emits fewer greenhouse gases compared to coal and oil, making it an attractive transitional fuel in the shift towards lower-carbon energy sources. The world's increasing focus on cleaner energy sources has elevated the demand for natural gas, positioning Australia as a major supplier due to its abundant reserves and LNG export capacity.

Australia's geographical proximity to key Asia-Pacific markets, where demand for cleaner energy sources is escalating, strengthens its position as a primary supplier of LNG. As countries globally commit to emissions reduction targets and cleaner energy goals, natural gas serves as a viable component of their energy mix, fostering demand growth.

Continuous advancements in extraction, liquefaction, and transportation technologies enhance the efficiency and competitiveness of Australian natural gas in global markets.

Increasing Demand for Alternative Fuel Driving the Natural Gas in Australia

The rising demand for natural gas in Australia stems from its increasing adoption as an alternative fuel across diverse applications. This surge is fueled by several factors, notably the comparatively lower environmental footprint of natural gas in contrast to traditional fuels. Moreover, Australia benefits from a well-established domestic natural gas distribution network, facilitating easy accessibility to locally produced gaseous fuel.

Australia's status as the leading global producer of liquefied natural gas (LNG) adds to its allure, particularly for individuals and industries concerned about securing a reliable and cost-effective fuel supply.

Fleet operators favor natural gas as a fuel due to its cost-efficiency, reduced environmental impact, and widespread accessibility via the established natural gas distribution network. The high demand for natural gas in Australia stems from its popularity as a sought-after alternative energy source.

Which Factor May Hamper the Natural Gas in Australia?

Fluctiuation in Global Energy Prices could Impact the Demand

Fluctuations in global energy prices, shifts towards renewable energy sources, and geopolitical factors influence industry competitiveness. Participation in international agreements and policies related to climate change and emissions reduction can impact the market.

Investments in pipelines, LNG terminals, and transportation infrastructure impact the ease of distribution and accessibility. Advancements in gas extraction, storage, and distribution technologies can influence production efficiency and industry competitiveness.

State-wise Insights

The natural gas industry in Victoria is poised to account for a CAGR of 2.5% through 2034. In 2024, the Northern Territory dominates the natural gas industry with an estimated 21.0% industry share. Meanwhile, the Western Australia natural gas industry is anticipated to exhibit substantial progress, aiming for a 2.3% CAGR through 2034.

What Factors Contribute to Victoria's Substantial Contribution to Natural Gas Production?

Increased Demand for Energy across Residential, Commercial, and Industrial Sectors driving the Need for Natural Gas in Victoria

Attribute	Victoria
Industry Value (2024)	US$ 2.014.2 million
Growth Rate (2024-2034)	2.5% CAGR
Projected Value (2034)	US$ 2579.7 million

Victoria is forecasted to hold 7.6% of the Australian industry share by the end of 2034. The growth is attributed to its access to substantial natural gas reserves. The state benefits from the long-standing production from the Bass Strait fields, along with other onshore and offshore reserves. This rich availability of natural gas positions Victoria competitively by ensuring a reliable and cost-effective gas supply to meet customer demands in the market.

Victoria's strategic advantage in the industry is due to its prime location near major demand hubs like Melbourne and Sydney. This proximity allows for efficient and cost-effective transportation of natural gas to these significant consumer centers. Additionally, Victoria boasts a robust and well-established infrastructure, further enhancing its capacity to cater to the demands of customers in these key areas.

Victoria's leadership in the natural gas industry across Australia is bolstered by strategic investments in pipelines, processing, and storage facilities. These critical infrastructures not only facilitate efficient gas delivery to customers within and beyond the state but also ensure a robust and secure supply even during peak demand or supply disruptions. Coupled with significant technological investments and government backing, Victoria's access to reserves and prime location further solidify its stronghold in the natural gas sector.

Why Natural Gas Demand Is High In Western Australia?

“Increased Commercial and Industrial Needs to Boost the Natural Gas Industry in Western Australia”.

Attribute	Western Australia
Industry Value (2024)	US$ 1,793.1 million
Growth Rate (2024-2034)	2.3% CAGR
Projected Value (2034)	US$ 2,240.2 million

Western Australia is forecasted to hold a 6.6% share of natural gas industry in Australia by 2034. Industries such as mining, manufacturing, and agriculture rely heavily on natural gas for various operations. Natural gas is commonly used in households for heating, cooking, and hot water systems. Its convenience and efficiency make it a preferred energy source in many homes.

Western Australia is a hub for liquefied natural gas (LNG) production. LNG is processed natural gas cooled to liquid form for easier transport. The export market, including Asia, contributes significantly to the demand for natural gas.

As Western Australia's economy expands and develops, the demand for energy across various sectors, including residential, commercial, and industrial, continues to rise, leading to increased demand for natural gas.

Category-wise Insights

Based on the application, the automotive fuel segment is estimated to hold a 22.7% industrial share in 2024. Simultaneously, industrial fuel segment is anticipated to secure a 15.8% share, contributing significantly to the industry growth. Based on source, the unconventional gas segment marks its dominance in the natural gas industry, with a share of 52.7% in 2024,

How is the Increasing Adoption of Engine Surrounding Impacting Growth?

“Increase in Adoption of Advanced Plastics in Engine Surrounding on Automotive Industry Growth”

Natural gas typically offers a cost-effective alternative compared to traditional gasoline or diesel, attracting consumers seeking fuel cost savings. Natural gas produces fewer emissions compared to conventional fuels, appealing to environmentally conscious consumers and industries striving for cleaner operations.

Australia's ample natural gas reserves and established distribution networks make it readily accessible as an automotive fuel option. Expanding infrastructure for natural gas refueling stations supports its usage as an automotive fuel, enhancing convenience for consumers.

The impact of these factors contributes to the growing traction of natural gas within the automotive fuel segment in Australia, fostering its adoption among various consumer and commercial vehicle users.

Attribute	Automotive Fuel
Segment Value (2024)	US$ 5,575.9 million
Growth Rate (2024 to 2034)	3.8% CAGR
Projected Value (2034)	US$ 7,501.4 million

Which is the most Prominent Natural Gas Source in Australia?

Unconventional Gas Segment to dominate the Industry

The growing demand for energy, both domestically and globally, prompts exploration and extraction from unconventional sources to meet the increasing consumption. Unconventional gas extraction projects offer economic benefits, generating jobs, investments, and revenue for local economies and the nation.

Unconventional gas, particularly LNG derived from unconventional sources, provides export opportunities, contributing to Australia's position as a major LNG exporter. While considered a fossil fuel, unconventional gas, when compared to coal, is perceived as a transitional and relatively cleaner fuel, supporting the move towards cleaner energy sources.

Attribute	Unconventional Gas
Segment Value (2024)	US$ 12,945.0 million
Growth Rate (2024 to 2034)	2.6% CAGR
Projected Value (2034)	US$ 17,141.3 million

Comparative Landscape

Major players in natural gas landscape in Australia hold substantial stakes, continuously endeavoring to bolster production capabilities and diversify their product offerings. Players invest in exploring new reserves and developing existing ones to enhance production capacities. Companies focus on expanding infrastructure like pipelines and LNG terminals to facilitate efficient transportation and export.

Government regulations, especially those governing environmental and safety standards, wield influence over the competitive dynamics of the market. Moreover, shifts in global trends, alterations in demand and supply dynamics, and fluctuations in prices can collectively impact the competitive landscape of the industry.

• In November 2022, Shell secured substantial shares in the leading European renewable natural gas (RNG) producer, Nature Energy, marking its significant presence as Europe's largest RNG producer.
• In June 2022, Qatar Energy selected Eni as a new international partner for the expansion of North Field East, recognized as the world's largest LNG project.

 Natural Gas Industry in Australia - Key Segments

• By Source:

  • Conventional Gas
  • Unconventional Gas

• By Application:

  • Automotive Fuel
  • Power Generation
  • Residential and Commercial
  • Industrial Fuel
  • Others

• By States:

  • New South Wales
  • Queensland
  • South Australia
  • Tasmania
  • Victoria
  • Western Australia
  • Northern Territory