The Australian government first proposed the reserve scheme in May, citing fears of severe gas shortages across the east coast. Regulators previously warned that the region could face a supply deficit by December. Under the latest iteration of the policy, producers would be required to set aside up to 20% of their output for local consumers starting in 2028.
Shell Challenges Australia’s Mandated LNG Export Curbs
“Fundamentally, it's a sledgehammer to crack a nut,” Shell Australia chairwoman Cecile Wake declared, attacking Canberra’s plan to force LNG producers to reserve output for domestic use. The company argues the government’s intervention represents an aggressive, unnecessary disruption to a market already functioning without such heavy-handed policy mandates.
Shell contends the mandate ignores the complexities of the global energy landscape, particularly as the market deals with a 20% supply drop linked to QatarEnergy’s force majeure. Beyond the volume requirements, the company objects to the specific stipulation that producers must supply 110% of east coast demand. Wake warned that forcing these volumes into the domestic market rather than allowing them to be offered competitively will distort pricing and ultimately sow the seeds of future market failure.
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