The Australian Government presented a draft design framework for its future domestic gas reservation scheme, a measure that will require exporters of liquefied natural gas to allocate part of their production to the domestic market starting July 1, 2027.
According to the document published by the Department of Industry, Science and Resources, exporting companies will have to reserve annually a volume equivalent to 20% of their exports for Australia’s domestic supply. This measure will form part of the so-called Domestic Supply Obligation, or DSO for its acronym in English.
The Government seeks to strengthen energy security
According to the Australian Government, the new scheme aims to improve the stability of the national energy market and ensure that households and industries have access to natural gas on competitive terms.
Likewise, the Government announced complementary reforms aimed at increasing transparency and efficiency in gas contracting. The objective is to create a clearer market for producers, distributors, and industrial consumers.
Authorities indicated that the draft is still subject to changes and that the final provisions will be defined through subsequent legislation following the public consultation process.
Domestic gas reservation raises concerns among exporters
The proposal has raised concerns among representatives of Australia’s energy industry. Australian Energy Producers warned that the preliminary design could affect future investment in new gas projects and disrupt market signals needed to expand energy supply.
The group also noted that the system could create uncertainty for international liquefied natural gas contracts with Asian countries such as Japan, South Korea, and Singapore.
In parallel, various analysts consider that the measure could alter the balance between exports and domestic supply in one of the world’s largest LNG exporters.
Regulatory reform and public consultation
The draft regulatory framework includes aspects related to calculating the domestic supply obligation, compliance mechanisms, and integrated reforms of the gas market.
In addition, the Australian Government opened a new public consultation period to receive feedback from companies, operators, and interested organizations until June 30, 2026.
Authorities maintain that current regulations will remain in force while the new regulatory scheme is developed.
A key debate for Australia’s energy market
The discussion on domestic gas reservation arises in a context marked by tensions in energy prices and growing concerns about the security of domestic supply.
Although the Government defends the need to ensure gas availability for the local market, part of the industry fears that greater regulatory obligations will reduce Australia’s attractiveness for future energy investment and LNG exports.
Source: Australian Government
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