Joint media release with Chris Bowen MP, Minister for Climate Change and Energy, and Madeleine King MP, Minister for Resources.

The Albanese Labor Government will secure more affordable gas for Australians, better protect businesses from international prices spikes and ensure industry is on a stronger footing when it comes to negotiating gas contracts through the introduction of a domestic gas reservation scheme.  

Detailed design will be developed in consultation with industry, international partners and communities, with a preference for a system where exporters need to meet domestic supply obligations before exports are approved.   

The scheme will require exporters to reserve between 15 and 25 per cent of gas production for the domestic market, with the required proportion to be settled after the forthcoming consultation. 

Design of the domestic gas reservation scheme will be driven by key principles as set out in the Gas Market Review, with the ultimate design goal being to secure the supply we need as we transition our energy grid and which puts downwards pressure on prices for domestic gas users.  

Principles that will guide detailed design include: 

• Existing contracts should be respected – both domestic and international contracts. Any contracts in place before today’s announcement will be considered existing contracts. Any contracts signed after today’s announcement will not be considered existing contracts.
• The reservation scheme should have capacity to be national in scope, working in tandem with federal, state and territory gas market mechanisms.
• The reservation scheme is intended to commence in 2027.
• The reservation scheme should increase domestic supply as existing contracts expire, to drive downward pressure on price.
• Under the preferred export approval model, exporters will need to meet domestic supply obligations first
• Producers should have flexibility to meet domestic and export obligations through a variety of standard commercial/market-based arrangements, including contracting with exporters or domestic producers so long as supply obligations are met.
• The reservation scheme should encourage long term domestic gas supply contracts to support investment decisions which rely on gas as an input, including C&I users and supporting gas infrastructure providers.  
• The reservation scheme should provide long term certainty for commercial production and investment, including by clearly setting domestic supply requirements well in advance of establishment and minimise impact on Australia’s LNG trade partners and their energy security. 

Secure and affordable gas is key for our Future Made in Australia agenda, particularly for nationally significant, trade exposed industrial users who can’t currently electrify. The Albanese Government is committed to safeguarding critical manufacturing capability and ensuring our domestic gas reservation scheme drives maximal downward pressure on prices.  

A domestic gas reservation scheme, paired with targeted market reforms, will help Australian heavy industries strike better contracts with more price stability and certainty to invest. Ministers will work with industrial users as part of consultation to ensure the final design of the gas reservation scheme and associated policy reforms ensure facilities critical to our national interest will continue to thrive in Australia.  

Australia has benefited from the development of a liquefied natural gas (LNG) export industry through export revenue, royalties and taxation, job creation, and economic development.  

But after a decade of policy failures the former Coalition Government left Australia with supply shortfalls, surging gas prices and no protections for domestic users.  

In the midst of a global energy crisis, the Albanese Government acted to shield Australians from surging international gas prices and secured 644 petajoules of extra gas supply – all measures that the Coalition opposed.  

Other key recommendations in the Review Report include considering phasing out the Gas Market Code’s $12/GJ reasonable price provisions and improving code rules for buying and selling gas to create flexible, principle-based requirements for selling practices, including reserved gas. 

The Government will also reduce red tape and promote transparency through streamlined governance arrangements and single sources of gas market information.  

Over 100 submissions were made to a public consultation process that ran from 30 June to 15 August 2025. Departmental officials met with over 80 stakeholder organisations during the consultation. 

Consultation will start immediately in 2026, with the aim of commencing a gas reservation scheme in 2027.  

The Gas Market Review report can be found here - https://www.dcceew.gov.au/energy/publications/gas-market-review-report

Quote attributable for Minister for Climate Change and Energy Chris Bowen MP:

“More affordable Australian gas for Australian users will support our economy and our transition, while remaining a reliable energy partner to our region. 

“Gas has an important role to play in our energy system as we transition towards 82 per cent renewables. Unlike coal, gas power generators can be turned on and off in a couple of minutes – providing the ultimate backstop in our energy grid. 

“We acted in the midst of a global energy crisis to address gas shortfalls, ensuring supply and protecting consumers from the worst price spikes – now is the time to seize the opportunity and deliver lasting reform to our gas market.” 

Quote attributable for Minister for Resources Madeleine King MP:

“The role of Australian gas in the economy is changing but it remains essential to industry, mineral processing, firming renewable power and for Australians in their homes. 

“This important reform to the national market will secure the gas Australians need while ensuring Australia continues to play its critical role in regional energy security."  

Quotes attributable to Minister for Industry and Innovation and Minister for Science Tim Ayres: 

“Secure and affordable gas for local manufacturing firms and heavy industry is critical to backing Australian industry and sovereign capability. 

“Our Government is supporting heavy industry to decarbonise as much as possible – but not every facility can, and some use gas as an irreplaceable feedstock.

“This is one of the reasons we will introduce a domestic gas reservation scheme – and I welcome industry input into its design in 2026.”