CHRIS BOWEN: Thanks for coming, everyone. Australian gas under Australian water under Australian soil is very important for Australia's future. We believe in the Albanese Government that Australians should have the chance for a fair go at first access to that gas. As you know, in December, Minister King and I announced that we would go down the path of establishing a gas reservation for Australia. We spent the last five months consulting deeply, right across the board with the industry, about the details, and today, we can announce that we have settled on a model which we will seek to legislate through the Parliament. That model will involve 20 per cent of Australian gas exports being reserved for Australian use first. There'll be a requirement on gas producers to sell that 20 per cent to Australian users. This is a carefully calibrated model which ensures that Australia's national best interests are put first.

For years, the Gas Statement of Opportunity and the ACCC have warned of gas shortages in coming years - for years, for the last 15 to 20 years every single Gas Statement of Opportunities has said there'll be a gas shortage. Those shortages have been moving further away under this Government and getting smaller, but they still exist. The policy that we announced today will see them dealt with, will see them go away. It will ensure a modest oversupply of Australian gas use, which will ensure downward pressure on prices but, even more importantly, provide that certainty of access to Australian heavy industry, which needs gas; to Australian homes that still use gas for home heating; and, for the support that gas-fired power stations provide for renewables.

Australian gas use is coming down. This last quarter that's just gone, the first quarter of 2026, saw the lowest gas use in 26 years - the lowest gas used since 1999. That's batteries and renewable energy displacing gas in our energy system primarily. That's a good thing. That's part of our transition. But as that gas use comes down, it does not mean it becomes less important - less important for heavy industry, less important to support renewables, less important for those Australians who are still using gas for home heating and cooking. While many Australians are making the choice to move away from it, those Australians who are still doing it reliably.

So, this is an important policy that gets the balance right. It applies to prospective contracts and the spot market. We will not disturb any existing contracts. We have consulted closely and worked closely with trading partners to ensure that it's well understood around the world that Australia will always be a reliable supplier of energy, but will be a reliable supplier of energy with Australian needs being catered for and Australian needs being met.

Australia has been the only gas exporting country in the world without some form of reservation. That changes under the Albanese Government. A sensible reservation policy, a reservation policy which has been carefully designed. I want to thank Madeleine and Tim and the entire Cabinet - but Madeleine and Tim in particular, for working so closely together, the three of us, on this. This is a policy which will obviously not please everyone - often good policy doesn't - but it's good policy which puts Australia's national best interest first.

Madeleine and then Tim.

MADELEINE KING: Thanks, Chris. And I also want to acknowledge the great work of Chris and also Tim and also to acknowledge our Foreign Minister Penny Wong in developing this policy.

So really very importantly, the gas reservation scheme will be working to ensure that we keep more Australian gas here in Australia for Australian homes, for Australian businesses, and for Australian industry. So I'm going to take you through a bit of the background to this.

For about a decade, our domestic gas policy settings have really been shaped by intermittent crises in global markets. We saw this most recently, I suppose, in 2022 when the Albanese Government was first elected amidst a global energy crisis which was felt here in the surging of gas prices. And that was compounded by outages and coal-fired power stations at the time. So, in response to that crisis we acted quickly. We formed the Domestic Gas Security Mechanism, which the Morrison Government had failed to extend. We signed new heads of agreement with the LNG producers on the east coast to ensure there were surplus supplies for Australian users. And we introduced the Gas Market Code and the price cap. And people will recall we went back to Parliament to make sure that happened and, in doing so, went on to secure 644 petajoules of gas for domestic purposes.

Now, all of these policies have worked to stabilise the gas market and place that downward pressure on gas price, but it is a collection of policies developed in an ad hoc fashion over many years. So really importantly, what we're announcing today, have been working on for a number of months and will continue to work on after today, is a very important and historic structural shift in Australia's domestic gas market policy settings. And it will ensure that we have stable and, really importantly, long-term policy settings that will drive a permanent wedge between international and domestic gas prices.

And I really can't overstate the significance of the reform we're all talking about today. And our gas market, our gas market prices, will no longer be hostage to international markets. Chris has mentioned, this will require LNG exporters to supply 20 per cent of their total export production into the domestic market. It will commence on 1 July 2027.

So this will put- we expect, and we're doing this because it will put downward pressure on gas prices, and I'll just speak a bit about how that will happen. So from July next year, if LNG exporters want to access the quite lucrative, from time to time, international spot market, they will need to demonstrate to me, as Minister, that they have actually and properly supplied the domestic market. And in order for that to happen, to get an export approval, that means they have to go further than simply offering gas, which is the current requirement. They have to actually supply. So, that that means it's a structural shift which changes the bargaining balance and creates, really, a buyers’ market for domestic gas buyers - whether that be for power, for [indistinct] industry indeed. And that's how we expect it'll drive down gas prices. Chris has mentioned of course, we’ll preserve all foundational and existing contracts.
We also are doing streamlining reforms. We will remove the Australian Domestic Gas Security Mechanism; remove the heads of agreement; and, reform the Gas Market Code in an appropriate way. And it is a product of the gas market review. Of course, there's been significant consultation with the gas industry and I welcome their continued support and engagement as we immediately commence further detailed consultation.

I'll hand over to Tim in a moment to speak on the reservation, but I have a couple of other items very quickly. I'm happy to confirm this joint authority the Victorian and Commonwealth Government's approved the new petroleum production licence for the Annie Gas Field. Many of you will have seen that reported earlier in the day. And we will also, as the Commonwealth Government, be seeking nominations of new areas for offshore petroleum exploration off Victoria and Tasmania. This will be on an expression of interest basis, and information will be available on the Department of Industry, Science and Resources website shortly after this time.

And with that, I'll hand over to Tim.

TIM AYRES: Thank you, Madeleine and Chris. I want to thank you all for being here. This is a very significant landmark Labor reform.

For far too long Australian industry has faced very high gas prices, and the policy structural framework around that has led to that kind of necessary and ad hoc interventions that subsequent governments have had to make since the Australian industry faced global prices for gas. This decision to reserve 20 per cent of exports, Australian gas reserved for Australian industry and Australian households, is a landmark Labor reform. I want to thank my- I want to thank my colleagues for the way that we have worked together, and the whole Cabinet has worked together, in a careful way, in a deliberate way, to deliver this landmark structural reform for the Australian gas sector and for Australian industry.

I just want to explain what this means in our outer suburbs and our industrial regions for Australian industry. What it means for those facilities that are facing high gas prices now, is that they will see the lowest possible gas prices over the coming years and a certain investment horizon. And if those current domestic manufacturers making fertiliser, making iron and steel products, our foundational manufacturers now have certainty about what the shape of the gas market will be. That will lead to more jobs - more blue-collar jobs, more engineering jobs - in our regions and in our suburbs.

Secondly, in terms future investment, what this does is make it clear for iron and steel investments, for critical minerals to critical metals projects, for advanced manufacturing processes particularly where gas is a feedstock and is engaged in a chemical production process, that there is certainty about the lowest possible prices in Australia and that this becomes part of our future energy competitive advantage, foundational for a future made in Australia.

I'm really pleased that we're able to announce this today. I'm looking forward to couple of months as we engage with industry on some of the detailed policy settings that we will have Australian gas, 20 per cent of exports, reserved from the middle of 2027 to strengthen Australian industry, to build our manufacturing and industrial capacity and to make Australia stronger.

CHRIS BOWEN: Thanks, Tim. Thanks, Madeline. Over to you, Lachlan.

JOURNALIST: Minister, this scheme will effectively flood the domestic market which will be a fillip to manufacturers, but also significantly harm the prospects of new domestic production being economic. Does the Government not want to encourage new sources of supply?

CHRIS BOWEN: I'm going to hand to Madeleine, but there's some assertions there, Lachlan, which I just don't agree with. I've seen some commentary to that effect in your newspaper this morning, but that doesn't make it true. It's a modest oversupply, which we have carefully calibrated. We've consulted right across the board. We think those yearly, twice-yearly warnings of gas shortages in one of the biggest gas producing countries in the world are a problem. We want to see them go away. This policy makes that go away. That's a good thing, not a bad thing. Madeleine.

MADELEINE KING: Thanks, Chris. So, domestic gas only producers are really important to the ecosystem of supply of gas in the country. I've consistently said, if gas had less distance to travel it will be more affordable for those that buy it - whether that be households, businesses, industrial manufacturers. So, that is why they play an important role.

We've been speaking to all parts of the gas industry, the gas producing industry, during the domestic gas review that we've been undertaking - the gas market review part of me - and I've no doubt will be speaking to them again through the consultation process that we're about to undertake.

JOURNALIST: So you don't think it’ll -

CHRIS BOWEN: No. And just to add- I mean, you know, again, as I said at the outset, this is not going to be uncontroversial - we know that. But look, people said similar things when the Western Australian Government introduced their gas reservation policy, what - 15, 20 years ago?

MADELEINE KING: 2008.

CHRIS BOWEN: You know, people said it would be the end of gas in Western Australia when the Gallop-Carpenter Government introduced their gas reservation policy. I'm not sure that's how it's turned out in Western Australia, and it's not how it will turn out here. And I should say, we'll be working closely with the Cook Government - and I've already communicated with Minister Sanderson this morning - we'll make sure that the two policies align very carefully.

JOURNALIST: Minister Bowen, can you guarantee today's announcement will bring down gas prices for Australians?

CHRIS BOWEN: It's going to put downward pressure on prices. And what it will also do is, to a certain degree, disconnect Australian gas from spikes in international prices. When the Ukraine war occurred we saw gas prices spike around the world. If this policy had been in place then, that would have had a much lesser impact on Australia.
[Interjections]

CHRIS BOWEN: Everyone gets a go at my press conferences. [indistinct], you’ll all get a chance.

JOURNALIST: Question for Minister Bowen, also for Minister Ayres. In setting the 20 per cent reservation threshold, how much of a consideration was ensuring there's enough gas-fired power generated for the forecast data centre growth in Australia?

CHRIS BOWEN: Well, it's part of the mix. We look at the ISP, we look at the gas statement of opportunities, we look at the needs for gas generation. As I said, gas-fired power stations are a useful support mechanism for renewables - that's the case with growing electricity demand, it's the case without growing electricity demand, but obviously, growing electricity demand. We've had two quarters of record electricity demand, and the grid has coped very, very well because of renewables and batteries and also, of course, the gas.

TIM AYERS: Yeah. I want to underscore Chris's last point. We went through the last summer. I can't remember a summer where there haven't been warnings or challenges in our electricity sector about brownouts and electricity shortages. That did not happen this summer. That is really important for households, a turning point in the reconstruction of our electricity system that I think, in no small part, Chris and the reforms that he has introduced can take credit for. It's also really important for industry and, of course, for the growing digital infrastructure investments that will happen in Australia.

Andrew Charlton and I released, just a few weeks ago, the Data Centre Expectations that are being embraced by industry, and we are engaged very closely with our colleagues at the state level. Gas will play an important part in our electricity network. But as a result of those investments there will be additional generation invested in, underwritten, and installed, that will put downward pressure on electricity prices too.

JOURNALIST: And so to confirm, when you talk about a modest oversupply in the market does that include the forecast demand from data centre growth?

CHRIS BOWEN: Yeah. It includes all the best forecasts we have available to us. Yes.

JOURNALIST: So Minister King, if I can ask specifics on prices. So at the moment, gas is around $12 to $14 per gigajoule. How much do you see the gas price falling under this policy?

MADELEINE KING: As Minister Bowen- we've both been consistently said, we expect this to put quite strong downward pressure on prices. And the reason is because of that flip in the market where, instead of it being all in the, really, the offering power of the producers, we've created a buyer's market where those producers, to get that export approval, have to compete among themselves for the contracts to supply - to actually supply not just offer - to the entire domestic consumption market. So we do expect- that's a very big change and not to be underestimated and we expect that to be a very strong influence of putting downward pressure on prices.

JOURNALIST: Okay. So, under previous governments, Peter Dutton talked about the 20 per cent reservation and talked about three per cent reduction in the bills. Is that your modelling? Is that what your ballpark is saying?

MADELEINE KING: That is someone else's work and, no, we did not follow someone’s-

JOURNALIST: [Interrupts] So, you've not done modelling on what this means-

MADELEINE KING: No. Look, we have done a great deal of work. We've had many discussions. We are not following the policies of anybody else. What we have done, since coming into Government, is reform existing policies to make them actually work at a moment when they were failing entirely to help Australian gas consumers. And now, we have worked on– on our very own, with our own departments, our own motivations, and that is to make sure that Australians have access to affordable gas over the long term. We have done the work through our various departments and that is what work this policy is based on.

JOURNALIST: So, you've done the work–

CHRIS BOWEN: [Interrupts] And I'll just add to that.

JOURNALIST: No, just to follow up.

CHRIS BOWEN: No, you've had several questions. I'm going to add to it and then I'm going to go to someone else and then, if there's time, we'll come back to you. As Madeleine said, what this policy does is put downward pressure on prices. But we also always recognise there are many impacts on prices - the cost of extraction, which is going up; the international price, which can go up and down, you know; and with factors well out of control of Australia or Australians with bombings and wars and other things. But what this does, with taking into account all those differing impacts on gas prices, gives Australians the best chance at lower prices. Yeah.

JOURNALIST: The Government recently ruled out bringing a tax on gas exports in the budget. Do you see a gas reserve as equivalent to a tax on gas? And does this mean you rule out ever doing a gas?

CHRIS BOWEN: Well they're very different things, but this is- I think what this does show, to be very frank, is that we are prepared to act in the national interest. And there’ll be people who are annoyed about this decision - you know, would rather just let them mark a rip and let them export whatever they like - I understand that. But we have a different job. Our job is to put Australians national best interest first and that's what we're doing today.

JOURNALIST: And you're not ruling out a gas tax [Indistinct]?

CHRIS BOWEN: Well the Prime Minister, and- on behalf of the Government, has made it clear that's not something we're doing in this budget.

JOURNALIST: Minister I’ve got an in-depth one…

CHRIS BOWEN: An in-depth one?

JOURNALIST: Does apply to contracted and uncontracted gas? And if it's just uncontracted, Gladstone LNG, which is owned in part by Santos, which has caused significant disruption to the market by buying domestic gas to export it will be exempt. Gladstone LNG will be exempt. So does that mean- not mean rivals APLNG and GCLNG will be disadvantaged by that?

CHRIS BOWEN: I'll go first and Madeleine can add. What this policy applies to is the spot market and uncontracted gas, so i.e. when foundational contracts come off, when the contract has run its course and the company seeks to enter into a new contract, when the reservation policy will apply.

MADELEINE KING: So in the scheme, you mentioned the three Curtis Island exporters. We're going go through, starting from today, a more detailed consultation process about how we work with each of those exporters and how we have provisions that allow for them to be able to access an export approval on the basis of what they provide domestically. That's going to take a bit of work, it's going to be quite detailed, but we are going to do it quickly. No one- this is across the board, it's national, no one is exempt. But we will go through a process, as Minister Bowen said, with the Cook government around how the Western Australian existing domestic gas reservation policy is taken into account. We'll go through a process with the Northern Territory around how we work with them to make sure it's accounted for. There will have to be provisions across the implementation of this to account for a number of factors, including simply restraints that exist currently on delivery of gas. So there's a lot to do, but we are committed to making sure that, again, Australian consumers get access to affordable gas into the long term. You mentioned delivery of gas there, consumers get access to affordable gas into the long term.

JOURNALIST: You mentioned the delivery of gas there. So the big issue is coming up in the later part of 2020s into the 2030s is that peak-day shortfall in Victoria, southern Australia, seasonal out shortfalls. How concerned are you about the availability of gas infrastructure to actually meet that despite this?

CHRIS BOWEN: So this policy will see those shortfalls dealt with. That's a big part of why we're doing it.

JOURNALIST: Is there infrastructure to carry?

CHRIS BOWEN: I'll get to the infrastructure. So that's a big part of it, we think it's just unacceptable for Australia to continually have, and they've had it under the previous government and under us, although it's been getting further away and smaller under us, those gas shortfalls forecast because that provides uncertainty for the industry. In relation to infrastructure, it's a fair question because there are constraints on infrastructure, you're right. What we will do is work with industry to best ways for them to develop that infrastructure so that they can meet their obligations. We think this supply obligation is not just about making gas available, it's about selling gas and that also involves getting gas to where it's required.

JOURNALIST: So given that there's obviously some concerns from the domestic gas producers like Beach Energy, their CEO Brett Woods said that short-term manipulation of the market would lead to a shortfall in the market eventually, ironically driving up the price. Are you concerned at all about the fact that these domestic gas companies are unhappy given they produce two-thirds to three-quarters of [Indistinct]?

CHRIS BOWEN: I'm sure there'll be gas companies, as I said. I'm not being critical of them. They would prefer let it rip, do whatever you like, no government intervention. That's not our approach. Our approach is this is Australian gas, so Australians should have first go at it. I understand some companies would prefer no regulation. [Indistinct]…

JOURNALIST: [Interrupts] But they're producing the gas at the moment for southern Australia.

CHRIS BOWEN: There is not- well, but of course they're going to argue that. Of course they would say that, wouldn't they?

JOURNALIST: They're not exporters.

CHRIS BOWEN: But- well, they'd also just prefer no government involvement in the gas market. That's not our approach because we want to make sure it works on behalf of all Australians.

JOURNALIST: [Indistinct]…

MADELEINE KING: [Interrupts] If you- sorry, pardon me [Indistinct]. Equally, it is unsustainable for a government to continue with this. I mean, it's working well and produced a lot of stability, but it's a patchwork of policies have been introduced over many years. And this is why the gas industry supported the principle of a gas reservation, because they did want to streamline what their market is governed by, by getting rid of these other things. So they may want something in- when they say that they support this reservation, and that's fine, and I know they've told me before and they’ve certainly told Chris, and they'll continue to say that. But as a government, we have to make decisions on the basis of our analysis of what we think gets us to where Australia needs to be in terms of access to gas and affordability of gas, and we think this is the best plan. Again, we will be going to consultation which will be detailed starting tomorrow.

JOURNALIST: So it won't knock out those Otway Basin and Gippsland Basin producers?

MADELEINE KING:  We are going to go to consultation. We will no doubt hear from Beach and Cenex and all the others. The domestic gas reservation policy in Western Australia has not knocked out domestic producers there, so we would expect that to be a similar outcome here.

JOURNALIST: So can you just [indistinct] the prices?

CHRIS BOWEN: Sorry, this gentleman hasn’t had a go yet.

JOURNALIST: Following the announcement yesterday that we have government-owned 1 million litres of fuel across Australia, I would like to know how much of that storage in the regional areas is already there? And then will the Government become an entity of the minimum stockpile obligation like alongside BP and all the others, and when we were purchasing for government reserves stop?

CHRIS BOWEN: Sure. They're good questions. So we made a very substantial announcement yesterday, which had two parts which is what your question goes to. Firstly, we're increasing the minimum stock obligation on the companies, on the entities, on all three fuel types. That's a good thing. That's appropriate. That will give them time to build it up, but nevertheless, that's a good thing. But separately and secondly, we announced for the first time a government-owned fuel reserve. This is a big change and a good change. We're in the minority in the international energy companies without a government-owned strategic fuel reserve. It won't make us an MSO entity, for your question. It will be separate. It will be separate. It will be a government-owned reserve separate to the minimum stock obligation. That's very useful for national strategic purposes. It would have been handy, for example, in the beginning of this international circumstance where I was ringing chief executives of fuel companies and saying there's shortages of regional New South Wales, there's shortages in Pilbara. They were very responsive and doing their best to get fuel to where it was needed, but they had contracts to meet first, legally. If there was a government-owned reserve where we could direct it to areas of shortage, it would have been very useful. So we are remedying that and creating a government-owned reserve that's quite separate from the MSO. We will work with industry to build any necessary storage and we will look at particular storage in regional areas, to your question, because that's often where the shortages might emerge and that's where fuel could best be kept. But it also needs to- but does need to also feed into the supply chain because you can't just have millions of litres of petrol or diesel sitting there and it not be turned over. It's got to be- it can't sit there for long. It's got to be used. So we're going to have to work with industry to develop that, and we will.

Last couple of questions, yes.

JOURNALIST: So, Minister King, can I come back to the prices? You've said you've done modelling. Can you just give a ballpark on what domestic prices could fall down to? 1 per cent, 2 per cent? You must have got some figures written down somewhere.

MADELEINE KING: I'm sorry to be repetitive, but we have introduced this policy because it will put strong downward pressure on prices. That's our expectation and that's our intent. We'll leave it at that.

JOURNALIST: Have you considered how it will impact smaller gas producers who only produce in the domestic market?

MADELEINE KING: I think we've answered that question already, but of course we speak to all of the gas producers, and no doubt we will- I won't say no doubt, we absolutely will speak to them again as we go through this consultation process into the future before this is implemented and starts on July 1 of 2027. There are domestic producers in Western Australia that still exist and there is a domestic reservation policy there.

JOURNALIST: Can I just clarify, is it 20 per cent per exporter or aggregate across the three?

MADELEINE KING: It's 20 per cent of LNG production, so of LNG exports.

JOURNALIST: Minister, within the context of the energy ministers' meeting next week.

CHRIS BOWEN: Tomorrow, in fact.

JOURNALIST: Oh, tomorrow. My apologies. The Data Centre Expectations and how they be implemented are a key focus. It's understood that additional renewables will have to come online. Will there be a threshold for the amount of renewables versus the amount of gas that data centres are using?

CHRIS BOWEN: So a little while ago Minister Ayres, Assistant Minister Charlton and I put out a paper which outlined our expectations. Well, principles based but nevertheless our strong expectations with the additional renewable energy and that there be redundancy in energy, i.e. flexibility, so that they have energy to spare. And by additional renewable energy, I want to stress that. I'm not just using renewable energy that would have been built anyway, but using PPAs to bring on new renewable energy. What I'll be discussing with state energy ministers tomorrow and territory energy ministers is how we operationalise that. Assistant Minister Charlton is coming along to help us with that discussion. It's not our first discussion, energy ministers, about data centres, but an important one. It's one of the key factors that we'll be discussing tomorrow.

We might wrap it up there, guys. Thanks for your time. Cheers. Thank you.