Australia imposes 20% domestic quota on LNG exports from 2027

The Australian federal government has announced the introduction of a domestic gas reservation scheme, under which gas exporters will be required to allocate a share of their total production to the domestic market, corresponding to 20% of exports, starting from 1 July 2027 (Australian federal government statement, 07/05/2026).

According to the government, the mechanism is intended to reduce gas prices and safeguard domestic industries that depend on gas, including gas-fired power generation. The reservation requirement will not apply to any export agreements concluded prior to 22 December 2025.

From its implementation date, projects seeking to export spot LNG will have to demonstrate that they are supplying the domestic market before obtaining authorization to export, effectively creating a buyers’ market for domestic gas.

However, most of Australia’s major gas reserves are situated in the northwest, whereas demand is primarily concentrated in the southeast, where population density is higher. The state of Western Australia already enforces a similar policy, requiring offshore export projects to allocate 15% of their gas to the local market (Business Times, 07/05/2026).

Australia ranks among the world’s largest LNG exporters and exports more gas than it consumes domestically. LNG exports have remained broadly stable since 2022 (reaching 118 bcm in 2024, equivalent to 75% of production), following a more than fivefold increase between 2010 and 2020, when exports reached 106 bcm. The country was the world’s leading LNG exporter from 2020 to 2022, ahead of Qatar and the United States, before being overtaken by the US in 2023 (Enerdata Global Energy Research).