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Australia eases LNG gas reservation rules to bolster domestic supply
The government says the change could add 200 petajoules to domestic supply, enough to offset projected shortages of about 140 petajoules.
Australia has relaxed gas supply reservation rules for LNG exporters to help secure more gas for the domestic market, according to OilPrice. The prior framework required producers to reserve 20% of output for Australia, while the updated proposal allows up to 20% to be reserved domestically.
The policy proposal was first tabled in May amid concerns about looming gas shortages, especially on Australia’s east coast. The competition regulator previously warned the market could swing into a deficit by December, and the risk was only temporarily averted by the Australian Domestic Gas Security Mechanism.
Under the government’s plan, reserved domestic supply would enable additional injections into the market, with Energy Minister Chris Bowen saying the scheme could add 200 petajoules to domestic supply. The article says that figure is more than enough to offset projected shortages of some 140 petajoules.
OilPrice also notes that the portion of output reserved by each LNG producer would be determined by the Australian Energy Regulator, with the government arguing the approach would expand the pool of gas available to domestic customers and reduce the likelihood of tight conditions driving price spikes.