Australia Oil and Gas Market Report - Industry Analysis, Size & Forecast (2025 - 2030)

Australia Oil and Gas Market Trends

Growing Natural Gas Production and Infrastructure Development

Australia's robust natural gas production growth has been a significant driver for the oil and gas market, supported by substantial oil and gas infrastructure development initiatives. The country has witnessed remarkable expansion in its oil and gas production capabilities, reaching 163,360 million cubic meters in 2022, demonstrating the sector's strong fundamentals and growth potential. This increased production has necessitated the development of extensive pipeline infrastructure, with Australia maintaining over 4,000 km of natural gas transmission pipelines that efficiently transport gas under high pressure from production sites to urban centers. The government's commitment to expanding infrastructure is evident through major projects such as the 580-kilometer pipeline construction in Western Australia, launched in 2022 with an investment of USD 460 million, designed to transport natural gas from the Perth Basin to resource projects in the state's Goldfields.

The Australian government's gas-fired recovery initiative has emerged as a crucial catalyst for market development, focusing on three key strategic areas: unlocking supply, delivering an efficient pipeline and transportation market, and empowering gas customers. This comprehensive approach has stimulated investments in gas infrastructure, particularly in the east coast gas market, where the entire supply chain is being enhanced to meet growing demand. The initiative has attracted significant private sector participation, as exemplified by Santos Ltd.'s strategic acquisition of a company owning an approved underground pipeline route for gas transportation from its planned Narrabri project, demonstrating the industry's confidence in the market's growth potential.

Increasing LNG Export Capabilities and Infrastructure

Australia's position as a leading global LNG exporter has driven substantial investments in LNG infrastructure and related facilities, with the country achieving impressive export volumes of 180.96 million megaliters in 2022. This strong export performance has necessitated continuous development of sophisticated LNG terminals, processing stations, and storage facilities to maintain efficient operations and meet international demand from key markets including Japan, China, South Korea, Taiwan, and Malaysia. The expansion of export capabilities has led to the development of integrated infrastructure networks, including specialized LNG processing facilities, storage terminals, and transportation systems, creating a robust foundation for sustained market growth.

The midstream sector has experienced significant expansion to support these export capabilities, with investments focusing on developing comprehensive transportation and storage solutions for crude oil, natural gas, and refined products. The sector's growth is characterized by the development of sophisticated infrastructure networks, including tanker facilities for interregional water routes and extensive pipeline systems for domestic distribution. This infrastructure development has been crucial in enabling efficient movement of products from production facilities to temporary storage plants and large storage hubs for refining, ultimately supporting the distribution of end products such as LPG, jet fuel, gasoline, and diesel to various end-users including the residential sector, industrial users, and gas stations.

Segment Analysis: By Sector

Downstream Segment in Australia Oil and Gas Market

The downstream segment dominates the Australian oil and gas sector, accounting for approximately 68% oil and gas market share in 2024. This segment encompasses refineries, petrochemical plants, and retail distribution networks across the country. Despite the closure of some refineries like BP's Kwinana facility, the Australian government has implemented significant support measures, including a USD 3.7 billion fuel security package to maintain domestic refining capabilities. The remaining operational refineries, including Lytton (owned by Ampol) and Geelong (owned by Viva Energy), have received government backing of up to USD 1.8 billion through 2030 to ensure continued operations and fuel security. The downstream sector also maintains a robust retail network with companies like Chevron Australia Downstream operating over 360 retail locations and managing multiple depots and seaboard import terminals.

Midstream Segment in Australia Oil and Gas Market

The midstream segment is experiencing rapid growth in the Australian market for the period 2024-2029, driven by extensive investments in LNG infrastructure and pipeline networks. Australia has established itself as a global leader in LNG exports with over 39,000 kilometers of natural gas transmission pipelines. Major projects like the Amadeus Basin-Moomba gas pipeline (950 kilometers) and the Queensland Hunter Gas Pipeline (825 kilometers) are enhancing the transportation infrastructure. The sector is further bolstered by the development of new LNG import terminals, with five import terminal projects currently under study using FSRU schemes. The Australian government's focus on expanding domestic storage capacity by 7-15 million barrels and implementing new pipeline projects demonstrates the strong growth trajectory of this segment.

Remaining Segments in Australia Oil and Gas Market

The upstream segment continues to play a vital role in Australia's oil and gas sector through exploration and production activities. This sector maintains significant operations in both onshore and offshore locations, with major basins including the Cooper-Eromanga, Amadeus, Carnarvon, and Bonaparte basins. The segment benefits from ongoing technological advancements in exploration techniques, enhanced recovery methods, and the development of new gas fields. Recent discoveries and government support for exploration activities, particularly in offshore areas, demonstrate the continued importance of this segment to Australia's energy security and export capabilities.

Segment Analysis: By Location

Offshore Segment in Australia Oil and Gas Market

The offshore segment dominates Australia's petroleum & gas market, accounting for approximately 88% of the country's total petroleum production in 2024. This segment's dominance is primarily attributed to the vast reserves located in major basins, including the Bonaparte, Browse, Northern Carnarvon, Otway, Sorell, and Gippsland basins. The segment benefits from significant government support through legislation like the Offshore Petroleum and Greenhouse Gas Storage Amendment Bill 2021, which strengthens the regulatory framework. Major offshore developments, including the Sasanof-1 exploration well and Beach Energy's Artisan 1 discovery in the Victorian Otway Basin, continue to bolster production capabilities. The segment's strength is further enhanced by Australia's position as a leading global LNG exporter, with most of its LNG production sourced from offshore fields.

Onshore Segment in Australia Oil and Gas Market

The onshore segment is expected to demonstrate robust growth during the forecast period 2024-2029, driven by several favorable factors. The segment is witnessing increased exploration activities, particularly in the Cooper-Eromanga, Amadeus, Canning, and Surat-Bowen basins. The growth is supported by recent discoveries like the Lockyer Deep 1 project in the Perth Basin and the lifting of conventional gas drilling bans in Victoria. The segment's expansion is further propelled by the country's shifting focus toward natural gas production, especially in regions with large untapped onshore gas reserves. Government initiatives supporting domestic gas supply and competitive bidding rounds for exploration blocks are expected to accelerate growth in this segment.