The Albanese Government has tabled legislation for a national gas reservation scheme that targets a deliberate oversupply of the east coast market, set at 110% of forecast domestic demand, according to ministerial statements. Under the Domestic Gas Reservation Scheme, gas exporters will be required to make available up to 200 additional petajoules per year to the domestic market, more than covering forecast shortfalls of up to 140 petajoules.
Resources Minister Madeleine King and Energy Minister Chris Bowen announced in December that the government would establish the scheme, following which around five months of industry consultation took place. An exposure draft of the Domestic Gas Reservation Bill 2026 was released on 10 September for consultation, with submissions closing on 24 September. The updated legislation tabled to parliament included several changes from the draft, among them measures to limit ministerial discretion and prevent loopholes, The Nightly reported.
Speaking at the National Press Club, King said she expected the oversupply element of the reservation would push gas prices down and described it as a very important aspect of the scheme. She said the oversupply measure would not collapse the gas price, noting that both too little gas and a massive oversupply that crashes the market carry risks, and that it was a fine balance to achieve.
King said long-term investment contracts would be protected, noting that trading partners in the region rely on those energy exports and that the contracts were entered into many years ago. None of the existing contracts will be disturbed, with the reservation covering only prospective contracts and the spot market.
Licensing applications under the scheme are scheduled to open on 1 January 2027, with obligations on domestic supply beginning on 1 January 2028, timed to match industry contracting cycles. Among gas-exporting nations, Australia stood alone in having no reservation policy of any kind until this point, the government said. WA introduced its own state-level gas reservation regime in 2006.
Bowen said the policy, designed after broad consultation, requires legislation through parliament and puts Australian national interest first, while acknowledging it would not please everyone. Shell and Woodside raised concerns that the scheme would influence pricing and said this could prompt them to reconsider projects.
Chamber of Minerals and Energy chief Aaron Morey said WA's domestic market received gas last year amounting to more than 20% of LNG exports, making intervention unnecessary, and that the bill was unclear on how any WA carve-out would operate for projects not yet under way. King said WA had been kept informed throughout the process and that adjustments to the bill adequately addressed Premier Roger Cook's concerns.
Gas exporters operating on the east coast will, from 1 January 2028, be required to supply a portion of gas they produce to the domestic market. The scheme is intended to create a modest oversupply in the domestic market, which the government says will place downward pressure on gas prices paid by households, businesses and manufacturers. Industrial gas users, including manufacturers and heavy industry, are intended to benefit from greater certainty of access to gas at more affordable prices.
Official statements: Ministerial statement
Reporting: Yahoo Finance, The Nightly
Written by Pick & Scroll News from the reporting and documents linked above.
