Australia to introduce bill reserving up to a fifth of export LNG

The Australian government plans to introduce legislation next week that will require liquefied natural gas producers to reserve up to 20 per cent of their output for local buyers. Rigzone News and Oilprice both reported that the proposal, known as the Domestic Gas Reservation Scheme, will set final rules forcing exporters to keep up to a fifth of their gas in the country. [1][2]

Three people directly involved with the proposal told Rigzone News that the bill will be introduced next week. According to Oilprice, the legislation is designed to address expected supply issues on the east coast of Australia at the end of the decade. Oilprice also reported that the scheme is scheduled to come into force on July 1, 2027. [1][2]

Australia is currently the second-biggest exporter of LNG in the world, having moved up in rank after Middle Eastern war disrupted supply from Qatar, according to Rigzone News. The nation exports approximately three-quarters of its total output. Specialized tank ships called LNG carriers transport the fuel at cryogenic temperatures of around minus 162 degrees Celsius, which reduces the gas volume 600 times to facilitate sea transport. [1][6]

The government is moving to finalize the controversial plan as domestic supply pressures loom. The upcoming legislation will establish the binding obligations for Australian gas exporters starting in July 2027. [1][2]