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In a bid to enhance domestic gas availability and curb rising costs, gas companies in Australia may soon be required to allocate 20% of their exports for local consumption.
Energy Minister Chris Bowen revealed that the proposed east coast gas reservation policy would oblige the three major gas exporters in Queensland to reserve a fifth of their output for Australian consumers starting from July 1, 2027.
“This strategy aims to create a slight excess in the domestic gas supply, which should help drive prices down,” Bowen stated during a press conference.
According to the policy, companies will need to demonstrate compliance with their domestic supply requirements before they can participate in the international spot market.
It’s important to note that this policy would only impact new contracts.
Resources Minister Madeleine King said the rule would shift the bargaining power and create a buyer’s market, leading to lower prices.
“Our gas market will no longer be hostage to international markets,” she said.
Australia is one of the world’s biggest liquefied natural gas exporters but risks supply falling below demand from as early as 2028, according to the Australian Competition and Consumer Commission.
Bowen admitted Australia was the only country in the world without a gas reservation despite being advised for decades that gas supply would eventually become an issue.
He and King began consulting with the industry on an overhaul to gas sector regulations late last year.
Greens resources spokesperson Steph Hodgins-May said the policy was “written by the gas industry, for the gas industry” and called for the government to introduce a gas export tax.
Prime Minister Anthony Albanese has rejected the recent push to introduce a 25 per cent tax on gas exports after independent Senator David Pocock revealed more federal tax is paid on beer than on gas exporters.
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