The federal government in Australia has gone ahead and unveiled a potential national domestic gas reservation scheme, wherein the gas exporters are going to reserve between 15% and 25% of gas production when it comes to the domestic market.
The proposal is part of the recommendations to counteract the alleged supply shortfalls, increased gas prices, and also no protections for domestic users, said the government.
Consultations in order to develop domestic gas reservation scheme have already started, and the scheme is all set to commence in 2027. The specific percentage that needs to be reserved is going to be settled post the consultations.
Chris Bowen, the Climate Change & Energy Minister, remarked that they acted in the middle of a global energy crisis in order to address gas shortfalls, making sure of supply and also safeguarding the consumers from the worst price spikes. He further adds that now is the time to seize this opportunity and roll out lasting reform to their gas market.
He also says that it will operate from 2027 but is going to apply from today when it comes to any new contracts that are entered into by their gas companies, hence highlighting that the scheme is not going to be applied to the existing contracts.
The government also went on to indicate its preference for a system wherein the exporters need to meet the domestic supply obligations before the exports get approved.
In response to it, the association, which represents the upstream and liquefied natural gas sectors in Australia, went on to confirm that gas producers go ahead and support the introduction of a prospective reservation scheme that is linked to new supply; however, they stressed the fact that the design as well as the execution needed very in-depth consideration.
Samantha McCulloch, Australian Energy Producers chief executive, said that, as they said from the very start of this review, a well-designed, prospective reservation policy can offer certainty for gas producers as well as users to go ahead and invest with confidence.
But a reservation policy alone is not going to fix the East Coast gas market. Bringing the new supply online faster, including within the southern states that are actually facing shortfalls, is that one sustainable way so as to put downward pressure on prices and at the same time keep the market well supplied, and that too for the long term.
McCulloch further emphasized the critical role of gas in the energy security of Australia and also urged the fast track when it comes to new supply by way of streamlining the approvals and also encouraging investment within new gas exploration as well as development.
The Australian Energy Market Operator – AEMO underscored the point that in its Western Australia Gas Statement of Opportunities that was reported earlier in December 2025, supply gaps within the domestic gas market of Western Australia are likely to emerge in 2030.
Bowen added that the proposed scheme is also going to work with the present Western Australian state policy, which went on to offer firsthand reference when it comes to the federal government.
It is worth noting that Western Australia already has a gas policy in place that requires LNG exporters to reserve the equivalent of 15% of production for the state’s domestic market.
A 2024 update went on to amend the policy to include that onshore gas projects must reserve 80% of their gas production in terms of domestic use till 31 December 2030, post which 100% will be reserved for the local market.
In 2022, the Australian government went ahead and signed a head of agreement in order to safeguard a gas supply shortfall as far as East Coast market was concerned.
The commitment of Australian East Coast domestic gas supply was inked by liquefied natural gas exporters so as to agree on uncontracted gas to be first made available to domestic market with prices not exceeding those for the international customers. The agreement was scheduled to run till 1 January 2026.
