Australia will require up to 25% of all new natural gas production to supply the domestic market, marking a major policy shift that could constrain LNG exports. The move impacts major producers like Qantas Energy (QAN.AX), Santos (STO.AX), and Woodside (LNG.AX) on the ASX.
- Australia will require up to 25% of new gas production to be directed to domestic use
- The rule applies to all new gas projects approved after January 1, 2026
- Major impacted companies include QAN.AX, STO.AX, and LNG.AX
- Potential reduction in LNG export capacity of 5–8 million tonnes annually by 2030
- Domestic gas pricing may stabilize, while global LNG supply could tighten
- Policy aligns with growing emphasis on energy security and regional supply resilience
Australia is implementing a binding requirement that up to 25% of newly developed gas resources must be allocated to the domestic market, a significant departure from previous export-focused policies. The rule applies to all new gas projects approved after January 1, 2026, and is designed to address growing domestic energy security concerns amid rising electricity demand and industrial needs. The policy affects key players across the Australian energy sector, including listed companies Qantas Energy (ASX:QAN), Santos Limited (STO.AX), and Woodside Energy (LNG.AX). These firms are projected to see reduced export volumes from new developments, particularly in Queensland and Western Australia, where most new gas projects are located. The regulation may slow project development timelines and impact capital allocation decisions. Industry analysts estimate the domestic gas mandate could reduce Australia's annual LNG export capacity by 5–8 million tonnes by 2030, depending on project maturity. This shift may tighten regional supply in Asia-Pacific, especially in Japan, South Korea, and India, where Australian LNG currently accounts for roughly 20% of imports. Global LNG benchmark prices could see upward pressure if supply from Australia declines relative to demand. Energy traders and power generators in Australia are expected to benefit from more stable and affordable gas pricing. However, exporters face potential revenue headwinds and increased regulatory scrutiny. The policy reinforces a broader global trend toward prioritizing domestic energy needs amid geopolitical uncertainty and climate transition pressures.