Three-quarters of east coast gas is shipped overseas. Australians pay export prices for the rest

Australia is one of the three biggest gas exporters on earth, alongside Qatar and the United States. Yet the competition regulator spent this winter warning that the east coast could run short, and in Victoria, where homes and small businesses use 60% of the state's gas, families pay prices that the energy regulator says are "influenced by international gas prices".

Here's where the gas goes.

Follow the gas

In 2024, LNG exporters used more gas than every Australian household, business, factory and gas power station on the east coast put together.

Then the price tripled

Before the Gladstone plants opened in 2015, east coast gas had been sold for decades at around $3 to $4 a gigajoule, according to the ACCC. Once producers could ship gas overseas, they could choose who to sell it to, and Australians started paying close to what Asian buyers pay.

Spot market prices in the second half of 2024 averaged just over $13 too.

After an emergency price cap in December 2022, a mandatory code has since July 2023 set a "reasonable price" of $12 a gigajoule for most gas sold by producers on the east coast, with exemptions. That's still three times what Australians used to pay.

Follow the money

LNG brought in an estimated $72 billion in export revenue in 2024-25.

The federal government's special tax on gas profits, the petroleum resource rent tax (PRRT), collected $1.42 billion. Queensland collected another $1.69 billion in petroleum royalties.

The PRRT isn't the whole tax bill. Oil and gas companies also pay ordinary company tax: $10.6 billion in 2024-25, the sector's second-highest on record, according to the ATO. But the PRRT is the tax meant to give Australians a share of the windfall from selling a resource they own, and expected receipts keep being revised down: by $2.5 billion over the four years to 2027-28 at the last mid-year update.

"If they export all their uncontracted gas"

The ACCC's latest outlook says the east coast should have enough gas for the rest of 2026. But it warns of possible shortfalls in the autumn and winter of 2027, "if LNG producers export all their uncontracted gas".

The pressure falls hardest on the south. In Victoria, 60% of gas is used by homes and small businesses, mostly for heating and cooking, and the old Bass Strait fields are running down. Southern states now rely on gas piped down from Queensland, past the export terminals, and on gas stored over summer.

The fix that starts in 2027

On 14 October 2026, the government introduced legislation for a national Domestic Gas Reservation. LNG exporters will have to supply Australian customers with the equivalent of 20% of their exports, "calibrated to forecast domestic demand", in exchange for the right to export. When the scheme was announced, the government said it would start on 1 July 2027.

"For too long Australians have watched our gas leave our shores while local households and businesses faced uncertainty and rising costs," Energy Minister Chris Bowen said.

But existing export contracts are respected. Law firm Allens says contracts signed before 22 December 2025 are excluded, which will mute the scheme's effect, and Santos's Gladstone LNG contract with Korea Gas Corporation is protected until 2031.

The other side

Gas companies argue the Queensland coal seam gas fields would never have been developed without the long-term export contracts that paid for them, and that the gas sold to Australians today exists because of that investment. The industry points to the jobs, the company tax and the royalties it pays, and says the answer to high prices is approving more supply, not interfering in contracts.

Shell Australia chair Cecile Wake called the reservation bill a "sledgehammer to crack a nut" and an "extraordinarily heavy-handed intervention into a market that is actually working well", warning it could push prices below the cost of bringing new gas fields into production.

Those are real arguments. But Australians were never asked whether they wanted to pay export prices for their own gas, and a decade on, they still are.

Top photo: LNG plants under construction on Curtis Island, near Gladstone, June 2013. Photo: Lock the Gate Alliance, CC BY 2.0, via Wikimedia Commons.