Australia Nears Final Gas Reservation Deal for LNG Exporters

The Australian government will introduce next week a bill setting the final rules in the so-called Domestic Gas Reservation Scheme, which will require LNG exporters to keep up to 20% of their total production in Australia, whose east coast is expected to face supply issues at the end of the decade. The scheme, which will come into force on July 1, 2027, has raised concerns among the biggest gas producers and exporters in Australia that argue the requirement could undermine Australia’s position as a reliable LNG supplier to the global markets.…

admin October 9, 2026

**Australia Set to Introduce Domestic Gas Reservation Law for LNG Exporters**

The Australian government is poised to introduce a bill next week outlining the finalized framework for its Domestic Gas Reservation Scheme. Under the new legislation, liquefied natural gas (LNG) exporters will be required to retain up to 20% of their production for the domestic market. The policy is scheduled to take effect on July 1, 2027, to address projected supply shortfalls on Australia’s east coast toward the end of the decade.

The proposed mandate has sparked concern among major domestic gas producers and exporters, who warn that the intervention could compromise Australia’s standing as a reliable supplier to global energy markets. Australia currently ranks as the world’s second-largest LNG exporter, having recently surpassed Qatar when Middle Eastern shipments faced disruptions in the Strait of Hormuz.

While the reservation scheme was designed prior to the escalation of recent geopolitical conflicts, the federal government is moving forward with the plan to prioritize domestic energy security. Sources familiar with the upcoming bill indicate that no LNG exporters will receive full exemptions from the new regulations.

Following intense industry lobbying, the government modified its initial proposal, which originally demanded a flat 20% reservation rate. Under the revised framework, exporters must hold back *up to* 20% of their output, with the exact volume determined annually based on a rolling five-year demand forecast.

In the short term, the domestic supply outlook remains stable. The Department of Industry, Science and Resources announced that the east coast market is expected to have a healthy gas surplus to meet demand during the first quarter of 2027.