Australian gas demand weakens as LNG exports fall to four year low

Looking ahead, IEEFA said gas faces a mixed future in Asia’s power mix.

Australian gas demand is weakening at home and across key Asian markets, according to a new briefing from the Institute for Energy Economics and Financial Analysis (IEEFA).

IEEFA reported that Australia’s LNG exports fell to a four-year low in the first half of 2025, partly due to Woodside’s decision to mothball a liquefaction train at the North West Shelf project.

The downturn mirrors a broader regional trend: Asia’s LNG imports recorded their largest half-year decline since 2010, dropping 9% YoY. China led the fall with a 21% contraction.

Exports continue to dominate Australia’s gas balance. 83% of gas produced in the first half of 2025 was directed to LNG exports, whilst domestic production and supply also declined.

Eastern states saw consumption fall across all major segments between FY2022–23 and FY2024–25, except for LNG-linked usage. In Western Australia, lower gas burn in the power sector and softer spot prices contributed to a drop in overall demand.

Interstate flows remain uneven. Victoria supplied roughly 1,050 petajoules to southern states between 2017 and mid-2025, whilst Queensland was a marginal net supplier at about 17 petajoules.

Looking ahead, IEEFA said gas faces a mixed future in Asia’s power mix. In several markets, rising renewable generation is displacing gas, whilst in others, declining domestic gas availability is prompting greater reliance on coal.

The region’s most LNG-dependent markets tend to be high-income economies with small land areas and limited domestic energy resources.

IEEFA’s tracker integrates data from Kpler and the Australian Energy Market Operator alongside IEEFA’s own analysis, and provides visualisations of production, exports, and interstate flows.