Australia Moves Forward With Major Gas Market Reset to Safeguard Domestic Supply
Federal review and industry support signal sweeping reforms to protect domestic gas availability amid looming east-coast shortages
Australia is embarking on a broad overhaul of its gas-market framework as the federal government and industry stakeholders prepare reforms aimed at ensuring long-term domestic supply stability.
A comprehensive “Gas Market Review,” announced in June 2025, will examine existing mechanisms — including the Australian Domestic Gas Security Mechanism, the Gas Market Code and export arrangements with east-coast liquefied natural gas exporters — to assess whether these remain fit for purpose.
The review is a central plank of the government’s 2024 Future Gas Strategy, which frames natural gas as a strategic transition fuel alongside renewables.
In recent months, industry groups have publicly backed major changes.
The trade body Australian Energy Producers (AEP) proposed winding back the old regulatory code and replacing it with new arrangements anchored around a prospective domestic-gas reservation scheme.
Under that scheme, new gas supplies would be prioritised for domestic use before being exported — a bid to rectify structural imbalances that critics argue have disadvantaged local consumers.
At the same time, major producers such as ConocoPhillips have begun ramping up exploration off Australia’s east coast.
The company recently initiated the first offshore drilling campaign under the Otway Exploration Drilling Program, targeting new gas fields with the aim of injecting fresh supply into the domestic east-coast market before anticipated shortfalls emerge toward the end of the decade.
Government officials emphasise that reforms are not meant to penalise exporters or impose sudden constraints on trade contracts.
Rather, they present the reset as a necessary adjustment to align Australia’s energy policy with long-term domestic needs, industrial stability and energy-security obligations to households and businesses.
The review invites wide stakeholder feedback; the final recommendations are expected by the end of 2026, with reforms to follow soon after.
Advocates for the reset argue this initiative may provide a blueprint for balancing domestic energy security and export revenues — potentially safeguarding millions of Australian households and businesses from volatile global LNG markets while maintaining the country’s role as a reliable energy exporter.
As the review unfolds and drilling resumes, the gas-market reset marks a turning point in how Australia manages its natural resources for the benefit of domestic users.
A comprehensive “Gas Market Review,” announced in June 2025, will examine existing mechanisms — including the Australian Domestic Gas Security Mechanism, the Gas Market Code and export arrangements with east-coast liquefied natural gas exporters — to assess whether these remain fit for purpose.
The review is a central plank of the government’s 2024 Future Gas Strategy, which frames natural gas as a strategic transition fuel alongside renewables.
In recent months, industry groups have publicly backed major changes.
The trade body Australian Energy Producers (AEP) proposed winding back the old regulatory code and replacing it with new arrangements anchored around a prospective domestic-gas reservation scheme.
Under that scheme, new gas supplies would be prioritised for domestic use before being exported — a bid to rectify structural imbalances that critics argue have disadvantaged local consumers.
At the same time, major producers such as ConocoPhillips have begun ramping up exploration off Australia’s east coast.
The company recently initiated the first offshore drilling campaign under the Otway Exploration Drilling Program, targeting new gas fields with the aim of injecting fresh supply into the domestic east-coast market before anticipated shortfalls emerge toward the end of the decade.
Government officials emphasise that reforms are not meant to penalise exporters or impose sudden constraints on trade contracts.
Rather, they present the reset as a necessary adjustment to align Australia’s energy policy with long-term domestic needs, industrial stability and energy-security obligations to households and businesses.
The review invites wide stakeholder feedback; the final recommendations are expected by the end of 2026, with reforms to follow soon after.
Advocates for the reset argue this initiative may provide a blueprint for balancing domestic energy security and export revenues — potentially safeguarding millions of Australian households and businesses from volatile global LNG markets while maintaining the country’s role as a reliable energy exporter.
As the review unfolds and drilling resumes, the gas-market reset marks a turning point in how Australia manages its natural resources for the benefit of domestic users.
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