WA Moves To Calm LNG Fears Over Canberra’s New Gas Export Rules
Synopsis
WA Premier Roger Cook says Canberra has assured the state that new domestic gas reservation rules will protect Western Australia’s major LNG industry.
Roger Cook, Premier of Western Australia, said he has been assured by the federal government that Australia’s new domestic gas reservation policy will not damage Western Australia’s LNG export industry. Speaking at the Australian Financial Review Mining Summit in Perth on Wednesday, Cook said Federal Resources Minister Madeleine King was determined to ensure the reforms would not negatively affect the state’s established LNG operations.
Key highlights
- WA premier says federal gas reservation plan will not hurt LNG exports
- New policy requires 20% of gas output for domestic supply
- Western Australia already operates its own 15% reservation scheme
- LNG giants Woodside and Chevron have raised concerns
- Federal scheme is set to begin from July 2027
Gas Reservation Plan
The federal government announced earlier this month that producers will be required to reserve 20% of gas output for domestic use under a new national supply scheme.
The policy is aimed primarily at easing supply shortages on Australia’s east coast and is scheduled to begin in July 2027.
It will apply to new contracts or extensions signed after December 22 last year.
WA Industry Concerns
Western Australia already operates its own domestic gas reservation system, requiring LNG projects to reserve 15% of gas production for local supply.
The state government and major exporters have expressed concern about potential overlap between the federal and WA systems.
Energy giants Woodside Energy and Chevron have both been monitoring the proposed changes closely.
Different Production Rules
One key issue for producers is that the new federal framework calculates reservation requirements using total lifecycle gas production rather than annual production, which is used under the WA scheme.
Industry groups fear the different methodology could increase compliance burdens and affect future LNG investment decisions.
A federal consultation paper released this week said the national Domestic Supply Obligation would operate alongside existing state policies, though details remain unclear.
LNG Market Importance
Western Australia accounts for nearly two-thirds of Australia’s LNG exports.
Following disruptions to Qatari LNG facilities linked to Middle East tensions, Australia has recently regained its position as the world’s second-largest LNG supplier.
Cook said WA would continue working with Canberra to understand how the federal policy could align with the state’s existing framework.
FAQs
Q1: What is Australia’s new gas reservation policy?
The federal government plans to require 20% of gas production to be reserved for domestic use.
Q2: When will the policy start?
The scheme is expected to begin in July 2027.
Q3: Why is WA concerned?
Western Australia already has its own gas reservation system and fears overlapping rules could affect LNG projects.
Q4: Which companies could be affected?
Major LNG exporters including Woodside Energy and Chevron are monitoring the reforms closely.
Q5: Why is LNG important to Western Australia?
WA produces around two-thirds of Australia’s LNG exports and plays a major role in global energy supply.
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