What caused the Australian Government to modify its proposed domestic gas policy?

The Australian Government softened its proposed domestic gas reservation rules following significant pushback from energy producers like Santos (ASX:STO) and Woodside Energy (ASX:WDS).

How does the updated gas reservation policy change requirements for major energy exporters?

The revised proposal requires major exporters, including Santos (ASX:STO) and Woodside Energy (ASX:WDS), to reserve "up to" 20 per cent of gas production rather than a fixed 20 per cent target.

When will the new gas reservation policy take effect across Australia?

The Australian Government delayed the start date of the gas reservation policy from July 1, 2026, to January 1, 2028. Ministers stated the 18-month delay will align the new requirements with existing industry contracting cycles for producers like Santos (ASX:STO) and Woodside Energy (ASX:WDS).

What gas supply shortfalls are expected on the east coast of Australia?

The Australian Energy Market Operator forecast east coast gas supply shortfalls of up to 140 petajoules starting from 2033. Government ministers stated the updated policy aims to cover these projected gaps as offshore Bass Strait fields operated by companies like Woodside Energy (ASX:WDS) continue to decline.

How does the federal gas reservation policy impact Western Australia’s domestic gas market?

Western Australia state leaders called to exclude the region from the federal scheme to protect its existing 20-year-old gas policy and local jobs. Major exporters such as Woodside Energy (ASX:WDS) and Santos (ASX:STO) currently supply 60 per cent of Western Australia's domestic gas through offshore projects.

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Australia waters down 20% domestic gas reservation policy

Escrito por Liezl GambePublished Sep 10, 2026, 5:13 AM

The Albanese Government has eased its proposed domestic gas reservation policy following industry pushback.
The start date for the rules was delayed to 2028, requiring producers to reserve "up to" 20% of gas.
Ministers stated the plan aims to ensure domestic supply and shield local buyers from price spikes.

The Australian Government has softened its domestic gas reservation policy following significant pushback from energy producers.

The original proposal would have forced exporters to set aside a strict 20% of production, but revised rules will now require "up to" 20% instead.

“Exporters could provide up to 200 additional petajoules of gas a year, ensuring more than enough secure gas along with domestic production to meet new manufacturing demands,” said Energy Minister Chris Bowen, Resources Minister Madeleine King, and Industry Minister Tim Ayres.

The implementation date was also delayed from July 2026 to January 2028 to better align with existing industry contracting cycles.

The Australian Energy Market Operator had previously forecast east coast gas shortfalls of up to 140 petajoules from 2033 as Bass Strait fields decline.

Energy producers, including Santos (ASX:STO) had raised strong concerns that rigid supply mandates would stifle future investment in new gas projects.

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