Sydney: Australia will require major gas exporters to reserve 20% of their export volumes for domestic use under a new gas reservation scheme, Energy Minister Chris Bowen announced Thursday, as the country seeks to ease pressure from a prolonged energy crisis. Bowen stated that the government finalized the model after extensive consultations with the industry.
According to Anadolu Agency, Bowen explained that the model would involve reserving 20% of Australian gas exports for domestic use first, with a requirement on gas producers to sell that portion to Australian users. The measure aims to ensure a modest oversupply in the domestic gas market, thereby putting downward pressure on prices and providing certainty for industry, households, and gas-fired power plants that support renewable energy.
The policy will apply to future contracts and the spot market, but existing contracts will remain unaffected. Resources Minister Madeleine King mentioned that the scheme would require liquefied natural gas (LNG) exporters to supply 20% of their total export production to the domestic market starting July 1, 2027. Exporters seeking access to international spot markets would need to prove they had supplied the domestic market before receiving export approval.
Australia has faced recurring pressure over domestic gas supplies despite being one of the world's largest LNG exporters. Households and manufacturers on the east coast have been exposed to high prices and tight supply linked to export demand and global energy market volatility. The Australian Competition and Consumer Commission recently warned of a potential supply gap in the east coast gas market in the third quarter of 2026.
The Australian Energy Market Operator has also warned of longer-term supply risks in the east coast market, where declining production from aging fields and limited new supply have raised concerns over future shortages. The energy squeeze has increased political pressure on Canberra to intervene more directly in the market after global gas prices surged in recent years, escalating costs for households and energy-intensive industries.