Business · Energy & Commodities · 39 mins ago
Australia proposes reserving up to 20% of gas exports for local use
Australia’s government has introduced a national gas-reservation bill to direct more gas to local customers.
Under the proposal, producers would set aside up to 20 per cent of gas intended for export for use in Australia.
The scheme is due to start in January 2028 and aims to keep domestic supply at about 10 per cent above expected needs.
Resources Minister Madeleine King says the plan should put downward pressure on prices, but she has not said how much prices might fall.
Australia has large gas exports, but declining output from ageing Bass Strait fields could leave Victoria and New South Wales short of supply later this decade.
Industry groups warn cheaper sales could deter investment and make future gas projects harder to develop.
The government says it will release an impact assessment, while the Coalition says questions remain about how supply and investment will be maintained.
Australia’s government has introduced legislation to require gas producers to reserve up to 20 per cent of export volumes for domestic use.
The scheme is intended to increase local supply and put downward pressure on gas prices.
The required amount would be set by the energy regulator, with a target of 110 per cent of Australia’s actual needs.
The proposed rules are due to start in January 2028 and would apply to companies shipping liquefied natural gas from Australia’s eastern seaboard.
The gas industry warns the policy could undermine investment and reduce future supply, while the government says it aims to balance affordability with continued investment.
- Who
- The federal government, led on the policy by Resources Minister Madeleine King, and large Australian gas producers.
- What
- Legislation would require producers to set aside up to 20 per cent of export volumes for local use.
- When
- The legislation was introduced on October 14, 2026; the scheme is due to start in January 2028.
- Where
- Australia, with the biggest impact expected on export terminals on Queensland’s Curtis Island.
- Why
- The government says the scheme will boost domestic supply and put downward pressure on prices. It is also intended to address concerns about future shortfalls.
Federal government
Gas industry
Policy purpose
Federal government
The scheme is intended to increase domestic supply and put downward pressure on prices.
Gas industry
The scheme could force sales below production costs and weaken the commercial case for future gas projects.
Future investment and supply
Federal government
The government says the rules are carefully balanced to keep new projects viable.
Gas industry
The industry warns the policy could make projects unviable and dry up supply in the long term.
SMH reported that the government planned to bring the bill to parliament on Wednesday.
The legislation was introduced to parliament.
The proposed reservation scheme is due to start.
- Export volumes reserved
- Up to 20 per cent
- Domestic supply target
- 110 per cent of Australia’s actual needs
- Scheme start
- January 2028
- Western Australia reservation requirement
- 15 per cent of LNG production
- Residential gas demand
- Down 16 per cent in Australia since 2020
4 sources
A fix for an ‘east coast problem’: WA wary as gas reservation policy unveiled
Australian industry reliant on gas for ‘foreseeable future’, resources minister tells press club
Forcing gas producers to sell to Australia won't 'crash' prices, King says
What people are saying
Allow me to be clear: we need gas to support the rollout of renewables. We need gas to have a strong Australian manufacturing industry. We need gas to continue heating our homes,
This is a landmark moment for our country – one of the Albanese government’s most significant structural economic reforms,
The government cannot expect industry to invest billions of dollars in new gas supply while introducing policies that fundamentally undermine the commercial viability of those investments,
Reserving gas on paper is one thing. Ensuring we have the supply, investment, and infrastructure to deliver affordable, reliable energy to Australians when and where they need it, is another,