Victoria’s Gas Security Statement outlines the action we are taking to secure long-term gas supply for gas-powered generation and the businesses and industries that need it.

For decades, Victoria produced most of Eastern Australia’s gas and still uses more gas than any other State. However, with gas no longer the cheap and abundant resource it once was, with legacy gas fields in Bass Strait depleting rapidly, and with gas from elsewhere more expensive than Victoria’s past supplies, decisive action is needed to shore up supply.

The Victorian Government’s pragmatic and comprehensive response combines a gradual reduction in household demand for gas with new supply and storage, all with a strong emphasis on ensuring supply for the businesses and industry that require gas.

Our Gas Security Statement details the action the Victorian Government has undertaken, the work we’re currently doing, and what comes next across 4 broad areas:

  1. Upstream supply: Securing gas for today and tomorrow
  2. Networks and storage: Building a flexible, resilient system
  3. End-use policy: Reducing gas demand and saving Victorians money on their energy bills
  4. How our actions secure Victoria’s gas supplies

Read the statement

Our key actions

Our key actions to drive down Victorians’ energy bills and secure the gas supply the State needs include:

  • Advocating for new powers for the Australian Energy Market Operator (AEMO) to address east coast gas supply gaps emerging from 2029, currently being developed by Commonwealth and State Energy Ministers.
  • Gradually reducing gas demand by helping Victorians drive down their energy bills by making the switch to energy-efficient electric appliances.
  • Required that, from 1 January 2024, all new homes that needed a planning permit be all-electric, and now requiring that from 1 January 2027 all new builds will need to be all electric. All electric homes are cheaper to heat, cool and run.
  • Introduced stronger energy efficiency standards including a 7-star energy rating for new homes, and minimum energy efficiency requirements for rental homes from March 2027.
  • Streamlining decision-making for new gas projects under the Development Facilitation Program.
  • Passing the Offshore Petroleum and Greenhouse Gas Storage Amendment Act 2024 in October 2024, allowing gas to be stored offshore in Victorian waters in underground reservoirs.
  • Approving production from Beach Energy’s Enterprise field in 2024.
  • Legislating in 2018 that producers in Victorian waters must offer their gas to the domestic market on reasonable terms.
  • Leading on regulatory reforms to maximise storage at the Dandenong LNG facility, giving AEMO the power to buy gas from suppliers to make sure it is full when we need it.
  • Developing a renewable gas scheme, proposing the Industrial Renewable Gas Guarantee, a market-based certificate scheme designed to support renewable gas production in Victoria.
  • Attracted $2 billion in new investment in gas exploration, production and storage since September 2024.

The combination of these actions will ensure that Victoria will avoid forecast structural gas shortfalls. In doing so, we will permanently slash energy bills for families while delivering long-term gas supply certainty for our industrial sector.

The actions taken to date have not only resulted in downward pressure on gas prices - with Victoria continuing to have the lowest wholesale gas prices in Australia - but have provided certainty in our gas supply outlook.

Victorian gas security statement graphic
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1. Upstream Supply: Securing gas for today and tomorrow

While the Government has set a strategic direction through its Gas Substitution Roadmap to move away from fossil gas in the long term, gas still provides essential services to Victorian households, businesses and industry.

The combination of actions the government has taken in the recent past, and those coming into effect in the near future, means gas users can be confident everything that can be done to support ongoing reliability and put downward pressure on prices is being done.

  • Passed legislation in 2020 compelling Victorian offshore gas producers to offer their product to the domestic market on just terms first.
  • Supported calls for a national domestic reservation scheme to cover the entire east coast gas market.
  • Restarted the onshore conventional gas industry, under improved environmental, consultation and market parameters. (Coal seam gas and fracking remain permanently banned in Victoria.)
  • Approved new gas production from Esso and Woodside’s Gippsland Basin Joint Venture and Beach Energy, supported multiple exploration campaigns and continued progress in storage and large infrastructure plays
  • Approved next steps in Viva Energy’s proposed LNG import terminal in Corio Bay.

  • Via the Development Facilitation Program, delivering faster decision-making and approvals for gas extraction, storage, transmission or importation projects, getting critical projects online sooner.
  • Looking to expand powers for AEMO to address East Coast gas supply issues emerging by 2029.

  • Consulting on the design of the Industrial Renewable Gas Guarantee (IRGG), which will deliver renewable gas into the system, ensuring the availability of high heat gas and methane feedstock to industries that need it, with a target of 4.5 PJ by 2035 under consideration.
  • Supporting large businesses to improve their energy efficiency and explore electrification, shoring up supply for gas-reliant industries and developing green industry skills and jobs.
  • Further reducing gas demand in homes by requiring Victorians to replace gas hot water systems with electric appliances and make the switch to energy efficient electric appliances to save on their energy bills.

2. Networks and storage: Building a flexible, resilient system

As the way Victorians consume energy evolves and gas supply sources change, the way Victoria uses its gas networks and storage will evolve too.

While electrification will gradually reduce long-term consumption, Victoria’s pipeline and storage network must remain resilient through the transition. Investment is required in storage facilities and existing pipeline infrastructure to maximise its efficiency.

  • Supported key pipeline investments to strengthen supply paths, including the Western Outer Ring Main expansion, and compression upgrades to increase the capacity of the South West Pipeline, adding 170 Terajoules per day in capacity.
  • Expanded underground gas storage infrastructure and passed legislation to permit underground storage in depleted offshore gas fields which together will boost Victoria’s gas storage capacity by over 90 per cent.
  • Limited abolition fees when customers convert their homes to all-electric and disconnect from gas.
  • Removed regulatory hurdles to renewable gas production.

  • Working with pipeline operators Jemena and APA Group to ensure critical enabling projects are in place to get gas from new sources to central Victoria where most gas is consumed.
  • Implementing new powers to direct the owner of the Victorian Transmission System to augment the system as necessary.

  • Targeted investments to ensure our infrastructure remains fit for purpose, delivering capacity and storage in the right places the right times.
  • Working with partner jurisdictions to review the regulatory regime for gas distribution networks to deal with challenges of declining demand as the transition proceeds.

3. End-use policy: Reducing gas demand and saving Victorians money on their energy bills

Reducing household gas usage through improved energy efficiency, electrification, and renewable gases will deliver bill savings for families while unlocking new supply for industry.

In total, Victoria’s gradual demand reduction efforts cumulatively will save up to 19.2 PJ by 2029 (equal to around 9% of Victoria’s industrial demand), and 205 PJ by 2035 - effectively representing a new source of the lowest cost gas in the country.

By reducing the level of demand for gas in the market, the Government is putting significant downward pressure on gas prices for Victoria’s industrial base.

  • Requiring that all new homes requiring a planning permit need to be all-electric. New all-electric homes are cheaper to heat, cool and run – and can save households $880 per year – or $1,820 per year on their energy bills when combined with solar panels.
  • Added efficient electric appliances to Australia’s largest energy efficiency program, Victorian Energy Upgrades (VEU) and consolidated our support for Solar Homes, providing rebates and incentives for solar PV and hot water heat pumps.
  • Begun the roll-out of the SEC’s Home Electric Planner to take the guesswork out of electrification.
  • Introduced stronger energy efficiency standards including a 7-star energy rating
  • Banned gas distribution businesses from offering incentives to connect residential buildings to gas or to purchase and install gas appliances to protect consumers from being locked into more costly and higher emission appliances.

  • From January 2027, all new residential buildings and many new commercial buildings will be required to be fully electric.
  • From March 2027, households will be required to replace gas hot water systems with electric systems when they reach end of life.
  • From March 2027, new minimum energy efficiency standards for rental properties will be phased in, covering ceiling insulation, draught-proofing, hot water, shower-heads, cooling and a revised heating standard, as well as end-of-life electrification requirements for gas heating and hot water.
  • Delivering the Energy Efficiency in Social Housing program, modernising Victoria’s social housing stock while slashing energy bills for renters.
  • For industrial and commercial businesses, supporting development of electrification and energy efficiency feasibility studies through the Large Energy User Electrification Support program.

This round of building electrification and minimum energy efficiency standards will be the final gas appliance reform in this term of government, to give households, businesses, and wider industry the required time to adjust to the new settings.

Annual updates to the Gas Substitution Roadmap will keep industry and the community informed.

4. How our actions secure Victoria’s gas supplies

The pragmatic and comprehensive actions listed above will reduce demand and increase supply fast enough to overcome the east coast gas market’s forecast shortfalls.

Our policies and the community action they enable, will:

  • reduce demand by just under 12 PJ per year by 2029
  • increase supply locally, with 25 PJ of additional gas production in 2029 already committed, and nearly $1.1 billion of exploration and production expenditure committed in Victoria and Commonwealth waters offshore
  • deliver sustainable renewable gas through the Industrial Renewable Gas Guarantee
  • work with other jurisdictions to empower AEMO with a new national role to fill any residual gap through a new bulk supply source such as an LNG regasification terminal or domestic supplies available through pipeline infrastructure
  • save consumers up to $1,820 per household by supporting conversion to all-electric homes, and energy efficient home design and appliances.

Page last updated: 24/06/25