Australia releases new areas for offshore gas exploration to boost energy security

Australia's Albanese Government has opened five new areas for bidding in the Otway Basin for offshore gas exploration to lower power prices, in order to ensure that the domestic industry has access to gas at affordable prices, the country's Department of Industry, Science and Resources said Dec. 11.

The release of new areas follows a review of the process for making new offshore acreage available for exploration and extensive consultation with the industry and stakeholders, Minister for Resources and Minister for Northern Australia Madeleine King said on the department's website.

The development also follows an announcement by the Victorian Government on Dec. 10 to release petroleum exploration permits in the Otway and Gippsland basins.

"Exploration and new discoveries will play an important role in underpinning our energy needs and support Australian industry and households as we meet our net zero commitments," King said.

"The release of new acreage supports our Future Gas Strategy and will help ensure Australians continue to have access to gas at affordable prices," she added.

The Future Gas Strategy maps the Australian Government's plan for how gas will support the country's transition to net zero.

King said the new release areas, located in Commonwealth waters, have been designed to protect neighboring marine parks, with buffer zones established to safeguard marine park boundaries.

All projects will be required to meet strict environmental and emissions standards per usual processes, she said.

Public consultation on the nominated new areas will be open for eight weeks until Feb. 6, 2026, while applications for the exploration permits will close on June 30 next year, she said.

These new release areas have been agreed under the joint authority regime with the Victorian State Government. This offshore acreage complements South Australia's and the Victorian State Government's exploration programs, she added.

Releasing new acreage would help address the structural gas shortfalls forecast from 2029 by the Australian Energy Market Operator and the Australian Competition and Consumer Commission, the statement said, recognizing that tackling shortfalls is vital for manufacturers who require gas as a feedstock or as a heat source and cannot transition to alternatives in the short to medium term.

Industry welcomes move

In a separate statement on Dec. 11, the Australian Energy Producers said that it welcomed the release of new acreage.

Australian Energy Producers Chief Executive Samantha McCulloch said the decision reaffirms the essential role of natural gas to Australia's energy security and the necessity for continued investment in new gas supply.

"Exploration is a critical first step in the discovery and development of new oil and gas resources needed to ensure Australia's long-term energy security," McCulloch said.

"Bringing new gas supply online sooner is the only sustainable solution to put downward pressure on prices," she added.

In June, the Department of Industry, Science and Resources stated on its website that it was conducting a Gas Market Review in conjunction with the Department of Climate Change, Energy, the Environment and Water.

The review aims to examine the Australian Domestic Gas Security Mechanism, the Gas Market Code and the Heads of Agreement with east coast LNG exporters, it said at the time.

"With the outcome of the gas market review expected to be announced shortly, we will continue to work with governments on measures to increase gas supply and ensure Australian homes and businesses have reliable and affordable energy," McCulloch added.

Australia is among the world's top LNG exporters, with market participants monitoring the country's production prospects to determine global demand-supply balances and the impact on international prices of the fuel.

According to the Resources and Energy Quarterly report by the Department of Industry, Science and Resources earlier this year, Australia's LNG export volumes are forecast to reach 82 million mt/year in the fiscal year 2026-27 (July-June), up from a forecast of 80 million mt/year in FY 2025-26.

Platts, part of S&P Global Energy, assessed the January JKM, the benchmark price for LNG cargoes delivered to Northeast Asia, at $9.75/MMBtu on Dec. 10, down 42.8 cents/MMBtu, or 4.2%, day over day.