Australia has announced immediate mandatory curbs on liquefied natural gas exports to prioritize domestic energy security amid rising demand and supply concerns. The move, effective from January 1, 2026, targets major exporters including Qantas Energy (QAN.AX), BHP (BHP.AX), and Snowy Hydro (SNOW.AX), with export volumes limited to 75% of pre-2025 levels.
- Australia will enforce a 25% reduction in LNG exports effective January 1, 2026.
- Major exporters QAN.AX, BHP.AX, and SNOW.AX are subject to the new curbs.
- Export volumes expected to drop from 85 million tonnes (2025) to 64 million tonnes (2026).
- Non-compliance penalties up to A$50 million per incident.
- Global LNG spot prices increased by 8.7% within one day of the announcement.
- Domestic power generation assets may benefit from strengthened supply priority.
Australia’s federal government has introduced emergency regulations requiring a 25% reduction in liquefied natural gas (LNG) exports starting January 1, 2026, to ensure sufficient supply for domestic industrial and residential needs. The policy applies to all major LNG producers operating in Western Australia and Queensland, including Qantas Energy (QAN.AX), BHP (BHP.AX), and Snowy Hydro (SNOW.AX), which together account for over 80% of the country’s LNG output. The restrictions are part of a broader national energy resilience strategy unveiled in response to forecasted demand spikes during winter 2026 and increasing regional energy volatility. The new rules mandate that exporters must first secure domestic supply commitments before exporting any surplus. Compliance will be monitored by the Australian Energy Market Operator (AEMO), with non-compliance penalties reaching up to A$50 million per violation. Industry analysts estimate that the curbs will reduce annual LNG exports from approximately 85 million tonnes in 2025 to around 64 million tonnes in 2026, a significant contraction in global supply. This reduction could tighten markets in Asia, where Japan, South Korea, and India rely heavily on Australian LNG for power generation and industrial use. The policy has triggered immediate market reactions. QAN.AX shares dropped 6.3% in early trading, while BHP.AX fell 4.1%, reflecting investor concern over revenue exposure. SNOW.AX rose 2.8% as the market interpreted the move as a potential boost to domestic power generation assets. Global LNG spot prices rose by 8.7% within 24 hours, with Japanese long-term contracts seeing a 12% premium. The changes also raise scrutiny over existing export contracts and could prompt renegotiations with Asian buyers, particularly in the context of volatile global energy pricing and shifting regional demand patterns.