Australia Mandates 20% East Coast LNG for Domestic Use

The Australian government has announced a new policy requiring liquefied natural gas exporters on the east coast to reserve 20 percent of their production for domestic use, aiming to prevent supply shortages and reduce energy prices for households and businesses. Energy Minister Chris Bowen unveiled the measure Thursday in Sydney, stating it would take effect from July 2027 after parliamentary approval.

The reservation scheme targets three major east coast LNG projects operated by Origin Energy, Shell and Santos, including Australia Pacific LNG, Gladstone LNG and QCLNG in Queensland. Exporters must prioritize supplying the reserved portion to Australian consumers before accessing the international spot market or signing new contracts. Existing export agreements signed before the government's December 2025 announcement remain unaffected. Resources Minister Madeleine King noted that producers seeking export approvals must first demonstrate they have met domestic needs.

Bowen described the policy as a structural shift modeled on Western Australia's longstanding requirement for LNG exporters to reserve 15 percent of production locally. That system has helped maintain stable supplies...