The domestic gas reservation scheme, which will require exporters to allocate 20% of their export volumes to the Australian market, is planned to take effect from July 1 next year. Representatives of the extraction industry have expressed dissatisfaction with this decision.

Reasons for Introducing the Scheme

The introduction of the scheme is linked to supply shortages and rising gas prices. The Australian government has announced measures to protect the domestic market from global energy shocks and has also expressed its intention to invest in reliable and renewable energy sources, while maintaining the necessary gas reserves within the country.

Discussion and Implementation Details

Consultations on the proposed scheme began in December last year. The escalation of the crisis in the Middle East has made energy security a top priority for the government. Export contracts signed before December 22, 2025, will be fulfilled in full. Authorities are continuing consultations on the final details of the scheme.

Industry Response

The Australian Energy Producers (AEP) association has voiced concerns about the potential impact of the scheme on competition, investment, and future gas supplies. According to AEP, the requirement to allocate 20% of export volumes to the domestic market could push out smaller local producers, reduce competition, and affect future supply. It is noted that 20% of export volumes represent about 60% of the gas market on the east coast. There is also a risk to Australia’s reputation as a reliable trading partner, especially at a time when LNG supplies are critical for regional energy security.

International Context

Australia holds a significant position among suppliers of liquefied natural gas (LNG) to Asia-Pacific countries, including Japan, China, and South Korea. Japanese companies such as Inpex, Jera, and Mitsui own stakes in various gas projects in Australia. Inpex operates the Ichthys project, with about 70% of its production supplied to Japanese buyers.

Position of Foreign Investors

Inpex has acknowledged the government’s efforts to ensure energy security and long-term gas supply for the domestic market through the reservation scheme. The company emphasized the importance of transparent energy pricing based on supply and demand balance, stable policy, and minimal government intervention. It also pointed out that the Ichthys project faces physical and commercial constraints that limit its participation in supplying gas to the east coast. Inpex believes that Australia should reaffirm its role as a reliable LNG supplier to Asia, positioning export deliveries as vital for regional security and the economic stability of its partners.

Comparison with Other Regions

Australia’s Minister for Resources compared the new scheme to the existing policy of reserving 15% of gas in Western Australia, noting that this measure did not lead to the displacement of local producers, and a similar outcome is expected on the east coast.

Additional Initiatives

Amid growing calls for energy security, some industry representatives in Australia have recently proposed introducing a gas export tax. A special committee on gas resource taxation presented its final report, but no consensus was reached on the proposed 25% export tax. The report was published on the eve of the national budget presentation.