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Gas usage in Victoria

Victoria uses more gas than any other Australian state or territory.

It heats homes and businesses, fuels gas-powered electricity generators and is a key input for manufacturing.

How the Victorian gas system works

Victoria’s gas system consists of:

  • gas fields and processing facilities that extract and process gas
  • high-pressure pipelines that transport this gas around the state
  • low-pressure distribution pipelines that deliver gas to customers.

Most gas is produced from the offshore Gippsland and Otway basins. The largest processing facility is at Longford in the east of Victoria. The largest storage facility is an underground facility at Iona in southwest Victoria.

This physical system is operated through a commercial market. This allows gas to be traded between producers and users and balances supply and demand. A range of national and state regulatory bodies ensure that this system operates safely and efficiently.

Transitioning to zero emissions

Victoria is on track to reach net zero emissions by 2045. With interim targets to reduce emissions by 28% to 33% by 2025 and 45% to 50% by 2030. To achieve these targets, we need to cut emissions across the entire economy, including from using natural gas.

As we transition away from natural gas, Victoria’s key priorities are to:

  • maintain energy affordability for all Victorian households and businesses
  • keep the supply of gas secure, reliable and safe for consumers
  • create renewable energy jobs and new skills over the coming decades.

We are developing the Gas Substitution Roadmap to help us achieve our interim targets and navigate the path to net zero emissions. This will include:

  • reducing fugitive emissions (gas leaks)
  • more efficient use of gas
  • electrification of homes, businesses and industrial processes
  • increased use of sustainable gas alternatives such as hydrogen and biogas.

Input from the Victorian community and industry was sought to help inform Victoria's Gas Substitution Roadmap and assist the gas sector in reaching net zero emissions. Victoria’s Gas Substitution Roadmap consultation paper and submissions received are available on Engage Victoria.

Gas supply

The Australian Energy Market Operator (AEMO) issues an annual Gas Statement of Opportunities (GSOO) and Victorian Gas Planning Report (GGPR).

The GSOO provides information on the supply-demand balance and potential gaps under a range of scenarios for eastern and south-eastern Australian gas systems over a 20-year horizon.

The VGPR provides a focused assessment of the supply-demand balance in Victoria over the next 3 years

Gas distribution

Gas distributors own and manage the pipelines which deliver gas to homes and businesses across Victoria. 3 distributors are operating in Victoria.

Your home or business gas supply distributor depends on where you live or operate your business.

You cannot choose your distribution company.

Gas retail market

Most customers can choose to buy their gas from a range of different offers that have different prices and conditions. Customers can compare energy offers on the Victorian Government’s energy comparison site Victorian Energy Compare.

Some customers may have limited or no choice of retailer and offer. For example, in some areas of Victoria, a single retailer owns all of the local gas pipeline capacity. Other retailers have not successfully negotiated for capacity to provide alternative energy deals. Even if you cannot switch retailers, you still have rights under Victoria’s energy rules. Find out more about your energy rights.

Page last updated: 27/05/24