Australia softens East Coast gas reservation rule for LNG exporters

Santos

10/09/2026 01:15

By Renju Jose
SYDNEY, Sept 10 (Reuters) - Australia on Thursday relaxed slightly a proposed rule that would have forced energy exporters to reserve a fixed 20% of natural gas for its East Coast market, instead requiring them to reserve up to a fifth of production.
Energy Minister Chris Bowen said exporters could provide up to 200 additional petajoules of gas per year, more than enough to avoid the possible shortfalls of up to 140 petajoules forecast by the country's energy market operator.
The proposed policy will ensure "gas is more affordable and the domestic market is always modestly oversupplied," Bowen said in a statement.
The centre-left Labor government in May proposed the hard 20% gas reservation scheme for the East Coast. In December, the government proposed a plan to reserve between 15% and 25% of gas.
Three liquefied natural gas (LNG) export projects on the East Coast operated by Origin Energy ORG.AX, Shell SHEL.L and Santos STO.AX, respectively, will be affected by the reservation scheme.
Australia is one of the world's largest LNG exporters and ships more gas overseas than it consumes domestically. However, most of the country's large gas reserves are located in the northwest, far from the more populous southeast, where demand is concentrated.
The state of Western Australia already has its own reservation scheme, which requires offshore export projects to divert 15% of their gas to its local market. 
     

 (Reporting by Renju Jose in Sydney; Editing by Thomas Derpinghaus)
 ((renju.jose@thomsonreuters.com;))