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Gas industry overview
Gas is a vital energy source for Queensland's industrial and manufacturing sectors. It is also used in electricity generation throughout Queensland and is a major export industry that produces liquefied natural gas (LNG) from Queensland's gas resources.
Conventional natural gas is found and produced with other petroleum products such as oil. Coal seam gas (CSG) is found and produced from the cleats and fractures of coal seams. While the location and production method are different, natural gas produced from conventional gas fields and CSG gas fields is the same product.
LNG is gas that has been cooled to the point it becomes a liquid and is able to be safely stored and transported. The process of extracting gas and converting it to LNG is commonly broken into 3 industry classifications:
- upstream: surveying, drilling, extracting, processing and compressing gas
- midstream: transporting gas from the gas fields to the LNG plant via gas pipelines
- downstream: converting the gas into a liquid for shipment and export.
Customers wishing to connect to a reticulated gas network should contact their local gas or energy retailer. The relevant retailer will be able to confirm whether gas is available to your street.
Another form of gas used in households and industry is liquefied petroleum gas (LPG). LPG is a mix of propane and butane. It is stored and transported in metal canisters (gas bottles) as a liquid. LPG is produced by collection of butane and propane produced with conventional natural gas, and also as a by-product from the oil refining process. Its most common use is as a fuel for vehicles, barbeques and stoves.
This guide provides a visual overview of the petroleum and gas supply chain (PDF, 1MB).
Queensland's gas reserves
Demand for natural gas in Queensland is met from large reserves of coal seam gas (CSG) and relatively small conventional gas reserves, but there are significant differences in the way the gas is extracted and the location of the reserves in Queensland.
The majority of Queensland's conventional gas is drawn from fields covering the Cooper and Eromanga basins in the south and south-west of Queensland, with most production being from Ballera and Roma.
Small quantities of conventional gas continue to be extracted from the Surat Basin, Queensland's initial source of natural gas. CSG is drawn from the Bowen and Surat basins, with exploration activity also occurring in the Galilee Basin.
Read more about Queensland's gas reserves and production statistics.
Electricity generation from gas
A number of Queensland power stations generate electricity using natural gas as fuel.
Queensland's current gas-fired generators include those listed below. The figure in megawatts (MW) is their registered capacity for trading in the National Electricity Market.
- Barcaldine Power Station – a 37MW gas-fired generator located at Barcaldine
- Braemar Power Station – a 514MW gas-fired generator at Wambo, north-east of Dalby
- Braemar 2 Power Station – a 450MW gas-fired generator located south-west of Dalby
- Condamine Power Station – a 144MW gas-fired generator at Miles
- Darling Downs Power Station – a 644MW gas-fired generator located 40km west of Dalby
- Oakey Power Station – a 282MW gas-fired generator located in Oakey
- Roma Power Station – a 80MW gas-fired generator located at Roma
- Swanbank E – a 385MW gas-fired generator located south-west of Brisbane
- Townsville Power Station – a 242MW gas-fired generator at Yabulu, north of Townsville
- Yarwun Power Station – a 154MW gas-fired generator located 10km north-west of Gladstone
Also consider...
- Find out more with our interactive electricity generation map.
Gas transmission and distribution
Gas transmission
Natural gas is transported from the field to market by pipelines. There are 5 major natural gas pipelines in Queensland:
- South West Queensland Pipeline (SWQP) – Ballera to Wallumbilla (Roma) (937km)
- Carpentaria Gas Pipeline (CGP) – Ballera to Mt Isa (840km)
- Roma to Brisbane Pipeline (RBP) – Wallumbilla (Roma) to Brisbane (438km)
- Queensland Gas Pipeline (QGP) – Wallumbilla (Roma) to Gladstone and Rockhampton (627km)
- North Queensland Gas Pipeline (NQGP) – Moranbah to Townsville (392km).
These pipelines directly service large industrial customers and gas-fired generators. They also provide gas for localised distribution networks in and around Queensland cities and major regional centres.
In addition, the Queensland-South Australia-New South Wales pipeline link (QSN Link) between Ballera and Moomba was commissioned in 2009 and links the first 4 pipelines above to other pipelines in the interconnected East Coast Gas System, which includes New South Wales, Victoria, South Australia, Tasmania and the Australian Capital Territory.
Queensland's Wallumbilla Gas Supply Hub is a key gas trading exchange for the east coast. It is located at the interconnection of pipelines serving the Surat–Bowen Basin, linking gas markets in Queensland, South Australia, New South Wales and Victoria.
Gas distribution
There are natural gas distribution networks in:
- South East Queensland (Brisbane, Gold Coast, Sunshine Coast, Ipswich and Toowoomba)
- Oakey
- Roma
- Dalby
- Bundaberg
- Maryborough
- Hervey Bay
- Gladstone
- Rockhampton
- Grantham
- Coominya
- Moura.
Gas market
Since 2000 there has been increasing development of infrastructure to connect and move gas between east-coast states. At the same time, Queensland has seen the rapid growth of coal seam gas (CSG) developments and the establishment of a liquefied natural gas (LNG) export industry.
Most eastern Australian submarkets are now served by multiple basins and pipelines. The Queensland – South Australia – New South Wales (QSN) Link pipeline between Ballera and Moomba, which started operation in February 2009, physically links Queensland supply to the southern states.
Queensland is now also connected to the Northern Territory via the Northern Pipeline between Tennant Creek (NT) and Mount Isa (Qld) which commenced operations in January 2019.
Gas pricing
With the development of 3 LNG export facilities at Gladstone, sellers have an option where to sell their gas. If they sell to an LNG facility they may receive a 'netback' price that is the offshore price less the cost of processing and transport. This 'netback price' influences the price paid for gas in the domestic market and has made domestic gas prices more consistent with global markets.
The East Coast domestic wholesale gas market is supported by additional transparency and reasonable price requirements in the Australian Gas Market Code. This includes a price cap of $12/GJ to anchor sales negotiations.
Short-term wholesale gas trading
One domestic reform that has contributed to market growth, depth and liquidity is the Short Term Trading Market (STTM). The STTM is a wholesale gas market, linking transmission pipelines and distribution systems, that supports short-term trading between gas shippers, retailers and large customers at a defined hub.
The Australian Energy Market Operator (AEMO) uses participant bids and offers to schedule deliveries and withdrawals from gas pipelines at the hub for the next gas day.
STTM hubs operate in Brisbane, Adelaide and Sydney.
Gas supply hub
AEMO implemented a Gas Supply Hub (GSH) at Wallumbilla in March 2014, with support from the Energy Council.
The GSH is an exchange for the wholesale trading of natural gas. It is an interconnection point for the Surat–Bowen Basin, linking gas markets in Queensland, South Australia, New South Wales and Victoria.
It was introduced to enable improved wholesale trading for an east-coast gas market affected by significant LNG exports in Queensland.
Through an electronic platform, GSH participants can trade standardised, short-term physical gas products at each of the 3 foundation pipelines connecting at Wallumbilla. AEMO centrally settles transactions, manages prudential requirements and provides reports to assist participants in managing their portfolio and gas delivery obligations.
The GSH promotes transparent and efficient gas trading, allowing participants to manage the risks associated with variable gas prices. It also deepens market liquidity by attracting participants such as LNG exporters, industrial customers and gas-powered generators. Some data on volumes traded and prices is compiled by the Australian Energy Regulator (AER).
Gas market regulators
Australian Energy Market Commission
The Australian Energy Market Commission (AEMC) is the rule maker for Australian electricity and gas markets. It makes and amends the National Electricity Rules, National Gas Rules and National Energy Retail Rules. It also provides market development advice to governments. It has information on the gas supply chain and gas markets, and it holds a gas pipeline register.
Australian Energy Regulator
The Australian Energy Regulator (AER) regulates electricity networks and some gas pipelines, in all jurisdictions except Western Australia. It sets the amount of revenue that network businesses can recover from customers for using these networks.
It enforces the laws for the National Electricity Market and spot gas markets in southern and eastern Australia. It monitors and reports on the conduct of market participants and the effectiveness of competition. It also publishes the State of the Energy Market report.
Australian Energy Market Operator
The Australian Energy Market Operator (AEMO) manages and operates the east coast electricity and gas markets, including hosting gas market systems such as the gas supply hub, STTM, and the Gas Market Bulletin Board. They are also responsible for maintaining a secure gas supply and for contributing to the design of Australia's future energy system.
Other bodies
The GasFields Commission is a Queensland body that manages and improves the sustainable coexistence of landholders, regional communities and the onshore gas industry in Queensland.
Coexistence Queensland connects the state's landholders, rural and regional communities, and the energy and resources sectors to support social licence and promote better industry practices, as well as advises government and other stakeholders on coexistence issues.
The Australian Competition and Consumer Commission (ACCC) is another significant stakeholder. The ACCC is conducting an important inquiry into the gas industry and its regular interim findings are an important guide for policy development.
Gas retail and competition
Gas retail competition
On 1 July 2007, full retail competition (also known as Full Retail Contestability or FRC), was introduced into the Queensland natural gas market. This means all Queensland natural gas customers (other than those in Roma and Dalby) are entitled to choose which retailer they purchase their natural gas from.
For more information, download a copy of the Retail Market Procedures (Queensland) from the Australian Energy Market Operator website.
Gas retailers operate under the National Energy Customer Framework (NECF), a set of national laws, rules and regulations governing the sale and supply of energy to consumers.
Gas consumption
The majority of Queensland gas is used to produce Liquefied Natural Gas (LNG) for export to key trading partners.
Queensland's local gas consumption (excluding LNG) is currently about 150 petajoules per year. The majority of natural gas residential and small commercial users (i.e. those using less than 1 terajoule of gas a year) in Queensland are located in Brisbane. Large industrial customers are located in regional centres such as Gladstone, Townsville and Mount Isa, as well as Brisbane.
Electricity generation and industrial processes, including mineral processing, account for the vast majority of Queensland's gas consumption.
Queensland's residential and small-scale commercial use of gas accounts for only a very small proportion of consumption – significantly lower than in the southern states due to Queensland's warmer climate and resulting lack of gas use for heating purposes.
© The State of Queensland 1995–2024
- Last reviewed: 08 Sep 2021
- Last updated: 08 Sep 2021