The Australian federal government's newly announced 20pc gas reservation mandate will not apply to Western Australia (WA) state, which will retain its 15pc rule following consultation.
WA has engaged with Canberra to understand the policy implications of its decision, a WA government spokesman said on 15 May, with assurances provided that WA's existing gas reservation policy will "satisfy any requirements of a national scheme".
WA instituted rules reserving 15pc of all gas volumes from the state's four onshore LNG terminals for domestic supply in 2006. But Canberra had said it would apply laws requiring volumes equal to 20pc of LNG export volumes to be reserved for Australian users nationally.
"This is across the board, it's national, no one is exempt," resources minister Madeleine King on 7 May. "We will go through a process with the [WA] government around how the WA existing domestic gas reservation policy is taken into account."
WA is not connected to Australia's eastern states via either gas or electricity networks and hosts the Woodside-operated 14.3mn t/yr North West Shelf and 4.9mn t/yr Pluto terminals, as well as Chevron's 8.9mn t/yr Wheatstone and 15.6mn t/yr Gorgon LNGs.
Mandate shortfalls
Despite the 15pc mandate in WA existing for nearly 20 years, a 2024 parliamentary report found just 8pc of volumes of gas had actually reached domestic users but LNG projects including Australian independent Woodside Energy's 4.9mn t/yr Pluto terminal were making commitments to increase flows.
The state eventually softened restrictions to allow onshore developers of gas fields to export about 20pc of their output as LNG during a five-year window in a bid to drive new investment.
The federal 20pc domestic reservation scheme was announced prior to consultation commencing, but it now appears it will only apply in full to the three Gladstone harbour-based projects. Some companies operating in Australia's eastern states told Argus they expect this to begin from later next week, while King has also promised talks with the Northern Territory (NT) government about the reservation's impact there.
The NT, where the 3.7mn t/yr Darwin and 9.3mn t/yr Ichthys LNG terminals are located, has a small population and no significant pipeline connection to the east coast gas grid.
The reservation scheme will respect all LNG export contracts entered into before Canberra's announcement of the plan on 22 December 2025, King has said.
