Offshore gas storage
Victoria relies on underground gas storage to meet high demand throughout winter. A secure and reliable supply of gas is also essential as Victoria transitions towards more renewable energy.
The Australian Energy Market Operator (AEMO) has forecast risks of peak day shortfalls in southern regions from 2029. Victoria’s Gas Substitution Roadmap identifies challenges facing the gas sector and outlines actions to reduce Victoria’s reliance on fossil gas while maintaining reliability through the transition.
Currently Victoria only has one deep storage facility, in the southwest of the state. With the amount of gas produced from the Gippsland Basin declining, gas storage will continue to be vital when demand is highest for supplying domestic and industrial users as well as generating electricity.
To ensure an adequate gas supply for Victorians, the Offshore Petroleum and Greenhouse Gas Storage Act 2010 was amended in late 2024 to confirm that petroleum injection and storage is a permitted activity under a petroleum production licence.
The change relates to offshore gas production and storage in Victorian state waters, up to three nautical miles (around 5.5km) from the coast.
Fundamentally, it allows gas to be stored deep under the sea bed in the same way it has been stored under the coastal areas of south-west Victoria. This will help alleviate the potential shortfalls predicted by AEMO.
To support implementation of the offshore storage provisions, the Offshore Petroleum and Greenhouse Gas Storage Regulations 2021 were amended on 7 May 2026. The changes set out extra operational requirements for underground petroleum storage operations in Victorian waters. The licensee must now have a storage development plan - setting out information about the proposed operation, including geological data, methods and measures to ensure containment of stored petroleum - and a project timetable. The plan must be approved by the Minister for Resources.
The development of unconventional gas, coal seam gas and the use of fracking remain banned in Victoria.
Page last updated: 05 May 2026