Australia’s biggest east coast LNG producer just went on record with the federal government – and they didn’t mince words.

In a formal submission to the government’s Gas Market Review Consultation, Australia Pacific LNG (APLNG) called for a federally-mandated export licensing regime that forces LNG producers to keep a fair share of gas here at home. And not just from new projects – they want the rule to apply to existing supply too.

It’s a direct challenge to the status quo, where producers can ship the lion’s share offshore under long-term contracts while domestic users scramble for what’s left. The ACCC has already warned of shortages in Victoria and NSW by winter 2028 – and shortages don’t just mean less gas. They mean higher prices, more volatility, and weaker negotiating power for Australian buyers.

APLNG’s submission argues that:

• Every east coast LNG producer should have to contribute, not just a select few.
• The amount reserved should reflect actual east coast demand at the time – not a fixed quota that ignores market reality.
• The rules should stop producers buying domestic gas just to flip it overseas.

Why APLNG Might Be Playing a Longer Game

On the surface, APLNG’s proposal looks like a big win for the domestic market. But maybe there’s a strategic twist and it's not all out of the goodness of their corporate heart.

Right now, APLNG is one of the east coast’s biggest domestic suppliers. If a federal reservation rule spreads the obligation evenly across all producers, their share of that burden could actually shrink. Producers that currently supply less to the domestic market - or even buy domestic gas to meet export commitments (aka Santos) - would have to lift their game.

For APLNG, that’s a win–win: it strengthens their pro-domestic market image, while potentially reducing the relative load they’ve been carrying under existing arrangements. And by pushing for a federal framework, they also secure long-term certainty, avoiding a patchwork of state rules or ad-hoc interventions.

Not Everyone’s on the Same Page

Santos is taking a narrower stance. In a press release on 4th August, they promised all gas from their Narrabri project – 20 petajoules a year for at least 10 years – will stay in Australia. However, they only back reservation rules for uncontracted gas. Translation: no interference with current export deals.

Right now, Santos’ GLNG venture is actually a net purchaser of gas from the domestic market to help meet its export commitments. In other words, they buy more from the east coast market than they supply into it, which is exactly the imbalance APLNG’s proposal is likely designed to address.

Shell and other LNG exporters are willing to play ball on new projects but draw the line at applying reservation to existing supply. Their pitch is simple: focus on growing supply, not rationing what’s already committed. They warn that moving the goalposts on existing contracts could spook investors and slow down future developments, a risk they argue could leave the domestic market worse off in the long run.

What It Means for Business

On paper, a well-designed reservation scheme could be a win for domestic buyers:

• Better negotiating power – A deeper local market means less scarcity pricing and more contract leverage.
• Stability for planning – Predictable supply helps businesses lock in multi-year decisions without gambling on volatile spot prices.

But if it’s done badly, it could do the opposite:

• Slower supply growth – Heavy-handed rules on existing contracts could make producers scale back investment in new fields.
• Bottleneck risk – Reserving gas is pointless if it can’t physically get to the regions that need it.

Our Take

APLNG’s push isn’t just about helping the domestic market. It's an approach that could also shift the burden they currently carry onto competitors who supply less at home.

A reservation scheme that’s tied to real demand – and backed by new supply – could deliver stability without killing investment. But the gap between APLNG’s “level playing field now” and the more selective, future-only commitments from Santos, Shell, and others is wide.

For manufacturers, energy-intensive industries, and households, the stakes go beyond today’s prices. The decisions made now will shape the cost and certainty of supply in the years ahead. The stakes? Whether policy keeps Australia’s industries running – or keeps LNG tankers full as they sail away from our shores.

If you’d like to understand what these changes could mean for your business, get in touch with our team.

More power to you.