Australian government moves to restrict LNG exports

On 1 July 2017, the Australian government will introduce a mechanism to restrict east coast LNG exports if the domestic market is short of gas. The aim of the Australian Domestic Gas Security Mechanism is to ensure the eastern Australian market is adequately supplied before gas exports are permitted. Those LNG exporters which are not net contributors to the domestic market could face export restrictions at times of high domestic demand. Full details of how the mechanism will operate have not been released. The GLNG project is likely to be the main target as it is the net gas withdrawer, but the two other CSG-to-LNG projects could also fall within the mechanism’s remit.  However, restricting exports does not solve the critical issue of getting gas from Queensland to domestic demand centres further south.