Australia Targets Gas Exporters with 20% Domestic Supply Reservation
Australia's federal government is planning to introduce a national gas reservation scheme by mid-2027. The initiative will require exporters to direct at least 20% of their annual production to the domestic market, aiming to increase gas supply for Australian consumers and businesses amid high domestic prices.
The idea is to address the issue of gas shortages in eastern Australia. Energy researcher Saul Kavonic pointed out that the Gladstone LNG (GLNG) project, operated by Santos, has been a significant contributor to the problem.
Kavonic calculated that since 2016, Santos and its GLNG partners have bought back volumes equivalent to 20% of gas supplies in eastern Australia, which could have otherwise been available to local consumers. He believes that for the reservation scheme to be effective, it should apply to all three export LNG projects in Queensland.
Santos rejected criticism over GLNG's impact on the domestic market, stating that neither GLNG nor Queensland's LNG industry as a whole had caused gas shortages or spikes in domestic prices. The company attributed the problems to restrictions on gas exploration in New South Wales and Victoria.