Australia’s east coast continues to face a potential natural gas supply deficit, that is likely to hurt both households and industries which use gas in industrial processes – for example, fertilisers. In March, the Australian Competition and Consumer Commission (ACCC) predicted that between 2026 and 2036, there could be 2,179 petajoules (PJ) of unfulfilled gas demand, with an annual shortfall of up to 300 PJ by the mid-2030s. For context, in 2022-23, Australia’s total energy consumption in 2022-23 was 5,882.2 PJ.
The southern states are particularly vulnerable, projected to face a record 40 PJ shortfall in the September 2025 quarter; the government is confident there will be enough gas for the quarter, as about 30PJ of surplus gas from Queensland is drawn down, and 10PJ comes out of gas stores, but longer-term, the situation looks dire.
This was exacerbated in June with the revelation that an east coast cold snap combined with coal power outages had forced Victoria to consume more than 13% of its expected gas allocation for electricity generation in just three days.
The problem is that most of Queensland’s gas goes off to supply existing long-term export contracts, while Victoria bans fracking and coal seam gas extraction and new gas supply development in NSW has also been hindered by bans and regulatory uncertainty. The east coast market has increasingly relied on gas transported from Queensland at a higher cost – and now that market is staring a damaging long-term shortfall in the face.
However, markets being markets, there are some potential new sources working hard to address this supply gap: here are four of the most enterprising hydrocarbon juniors on the ASX doing just that. Empire Energy Group and Omega Oil & Gas look particularly attractive for investors who want to take a punt on gas.
- Empire Energy (EEG, 17 cents)
Market capitalisation: $173 million
12-month total return: –26.1%
3-year total return: –5.3% a year
Analysts’ valuation: 74 cents (Morgans)
Empire Energy hopes to become Australia’s next big onshore gas player, as it progresses its Carpentaria project in the Northern Territory’s colossal Beetaloo Basin. The Beetaloo Basin could contain 500 trillion cubic feet, nearly 20 times the size of the huge Northwest Shelf fields in Western Australia. Empire could deliver the first Beetaloo gas this year.
The project has faced scrutiny due to environmental concerns related to fracking and its potential impact on water resources and cultural heritage sites. Empire plans to initially draw gas from the basin to supply the Northern Territory government with as much as 100 terajoules (TJ) of gas per day: the company has a ten-year binding gas sales agreement (GSA) with the territory government. Under this agreement, when activated, the first sales will be to the McArthur River zinc and lead mine, with Darwin electricity consumers next in line. Further out, Empire is working with APA Group on pipeline options to transport large volumes of gas from the Beetaloo to Australian east coast markets (more than 500 TJ a day), firstly, by connecting its fields to APA’s existing Carpentaria Gas Pipeline between Mount Isa and Ballera in Queensland.
Carpentaria is expected to supply gas to the Ichthys LNG project, commissioned in 2018, which produces up to 9.3 million tonnes of LNG and 1.65 million tonnes of LPG a year, along with more than 100,000 barrels of condensate per day at peak. Ichthys LNG’s onshore processing facilities at Darwin include two LNG processing ‘trains’ as well as LPG and condensate plants — Carpentaria will support the Ichthys LNG project’s planned expansion to three trains by 2030.
Also, Empire’s ‘wet’ gas is expected to command a premium in markets like Japan, where demand for low-carbon dioxide gas is surging. At the moment, gas for the Ichthys LNG is supplied from the Brewster Member and Plover geological formations, which comprise the Ichthys gas field. The Beetaloo Basin gas which will be extracted by Empire has less than 1% carbon dioxide content, compared to 8% at Brewster and 17% at Plover. Carpentaria gas is about as “clean” as gas can get.
It’s great timing. All three of Empire’s target gas markets – the NT, east coast Australia and the
LNG export market – are structurally short of gas. The company is hoping to begin sales by the end of 2025 or early 2026.
- Amplitude Energy (AEL, 19.5 cents)
Market capitalisation: $517 million
12-month total return: –4.9%
3-year total return: –12.9% a year
Analysts’ consensus valuation: 27 cents (Stock Doctor/Refinitiv, nine analysts); 26 cents (FN Arena, four analysts)
The former Cooper Energy is mainly a pure-play domestic gas producer focused on Australia’s East Coast market, with assets in the Cooper, Otway, and Gippsland basins: the company’s key infrastructure includes the Orbost gas plant, which processes gas from the Sole field, and the Athena gas plant, which handles production from various Otway fields.
Amplitude and its cashed-up Israeli joint venture partner OG Energy (which bought a half stake in the company) previously held by Mitsui E&P Australia) are developing an Otway Basin gas project that could be a prospective new supply of gas for the energy-starved Victorian market,
The pair have formed the East Coast Supply Project (ECSP), aimed at delivering additional gas supply to the east coast market. The joint venture is drilling three wells in proposed new fields that Amplitude is exploring in Victoria’s Otway basin in Bass Strait:
Drilling at Eleanora will commence in the second half of this year, followed by Juliet and Annie in 2026, with management estimating a 98% probability of a gas discovery in at least one of these locations. From this outlook the joint venture is targeting supply of up to 90 terajoules (TJ) per day through the existing Athena plant from 2028, with first gas from 2028. This is subject to regulatory approvals, final investment decisions and successful execution. The projected yield is roughly equivalent to the demand of over 600,000 Victorian homes and will help to avoid potential gas supply shortfalls in Australia’s southern states.
Amplitude says it can produce the gas for a low $9 a GJ: chief executive Jane Norman has been quoted as saying it will be the lowest-cost, lowest-emission gas that can be supplied into Victoria. (The ACCC) has set a ‘reasonable’ price for gas at $12/GJ to support the East Coast domestic wholesale gas market, a cap for the duration of the current regulations.) Should all go well, Amplitude’s timeline should prove very attractive for east coast gas exposure with supply shortfalls predicted to occur as early as winter of 2025.
- Comet Ridge (COI, 15 cents)
Market capitalisation: $179 million
12-month total return: –25%
3-year total return: –3.1% a year
Analysts’ consensus valuation: 22 cents (Stock Doctor/Refinitiv, three analysts); 22 cents (FN Arena, two analysts)
Comet Ridge and its operating partner Santos are developing their Mahalo joint venture gas project in the southern Bowen Basin, Queensland, advancing the project into the front-end engineering design (FEED) phase, targeting a final investment decision (FID) by early 2026. FEED studies are conducted following feasibility studies to estimate the technical specifications, subsequent cost and procurement needed for a project, giving a good picture of project requirements and costs: starting FEED studies moves the Mahalo project out of the feasibility stage, toward the FID stage.
Comet Ridge owns 57.1% of the Mahalo JV project, with Santos owning the balance. The project currently has high-certainty proved and probable (2P) reserves of 266 petajoules (PJ) of gross gas volumes, as certified by Comet Ridge, and a further 315PJ in best-estimate (2C) contingent gas resources. It is considered one of the few near-term gas developments that is able to supply the east coast grid, with gas exports also likely, given Santos’ involvement in the Gladstone LNG project.
Comet Ridge has completed three successful commercial pilot wells, with a fourth pilot currently on-line, and performing ahead of expectations. These pilots are seen as having substantially de-risked the project.
The Mahalo Gas Hub area consists of high-quality natural gas resources with low carbon dioxide emissions – almost pure methane – and competitive production costs. The producing blocks are very close to existing infrastructure: located just 14 kilometres from the Denison processing and pipeline infrastructure, about 80 kilometres from energy infrastructure company Jemena’s transmission line to Gladstone, and then another 6 kilometres from to GLNG pipeline to Gladstone.
Comet Ridge also holds the wholly-owned Mahalo North and Mahalo East projects – it commenced production at the Mahalo East Pilot in January – that add more to its gas resources, indicating that the Mahalo Gas Hub will be a long-term development.
The joint venture has signed a gas sales agreement with the Queensland government’s CleanCo for the supply of up to 25PJ of gas: this gas is likely to be the first market production from Mahalo, expected to commence in FY26 (the year to 30 June 2026).
- Omega Oil & Gas (OMA, 30.5 cents)
Market capitalisation: $98 million
12-month total return: 56.4.7%
3-year total return: n/a (listed October 2022)
Analysts’ valuation: 64 cents (Morgans)
Omega Oil and Gas Limited is focused on unlocking the oil and gas potential of Queensland’s Taroom Trough, an emerging producing province withing Queensland’s Surat-Bowen Basin. The company’s Canyon-1 and Canyon-2 wells hit gas-rich zones in 2023, with the Canyon-1H well in particular revealing in 2025 substantial oil and gas flows, indicating a large and prospective petroleum system capable of supporting decades of commercial production.
Omega’s ground in the Taroom Trough currently has best estimate (2C) contingent resources of 1.51 trillion cubic feet (Tcf) of gas and 68.6 million barrels of liquids, meaning the project definitely has the potential to help address the Australian east coast gas shortages, and also help the undersupply through the Gladstone LNG plants. (There is still potential upside to these estimates, with further drilling.) Being just 50 kilometres away from APA Group’s existing Wallumbilla Gladstone pipeline, and just 150 kilometres from the Wallumbilla gas hub – the discovery can be quickly brought to the market, at relatively low cost.
To unlock its potential, OMA plans to develop Canyon using horizontal drilling and fracking, attempting to leverage proven techniques from the US unconventional industry, where similar plays are being successfully exploited. The company is targeting first production from its Canyon Gas Project in the Taroom Trough for 2029, with a project life of 40 years.
