Australia plans 20% gas export reservation amid backlash against Santos' GLNG project
The federal government will require exporters to set aside 20% of annual gas output for the domestic market, targeting Santos' Gladstone LNG project blamed for high local prices.
The Australian government is moving to impose a national gas reservation rule that would force exporters to allocate 20% of their yearly output to the domestic market, a step intended to ease high local gas prices. Critics point to Santos' Gladstone LNG (GLNG) project, which analysts estimate has diverted an amount equal to 20% of eastern Australia's supply since 2016, crowding out domestic users. Other Queensland LNG plants, operated by Origin Energy and Shell, have generally supplied the local market and now back the policy, partly out of frustration with Santos.
Minister Madeleine King says the scheme will respect existing export contracts and aims to make gas more affordable for households and businesses. Union secretary Paul Farrow and analyst Saul Kavonic argue the policy must apply uniformly across all three projects for it to be effective, warning that selective enforcement would reward poor market behavior. Santos maintains it has supplied the majority of winter demand and blames state bans on new exploration for price spikes. The outcome hinges on the government's willingness to confront entrenched industry lobbying.
Why it matters
Domestic gas prices affect households and industry; the policy could reshape Australia's energy market and hold exporters accountable.
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