An Australian Senate committee has backed the federal government's plan to require liquefied natural gas (LNG) exporters to reserve up to a fifth of their gas for the domestic market, Reuters reported.

The Domestic Gas Reservation Bill 2026 would oblige LNG exporters to supply gas equal to up to 20 per cent of the volume they export each year into the Australian market. The bill has already passed the House of Representatives and, if enacted, the scheme is scheduled to begin in January 2028.

Committee backing, but Senate passage not assured

The Senate Economics Legislation Committee reported on 11 November, recommending that the upper house pass the bill. Coalition senators opposed the proposal in its current form, saying they would not support it without substantial changes, according to Australian Associated Press reporting.

That leaves the Labor government needing support from either the Coalition or the Greens to secure passage through the Senate, with debate expected later in November and only two sitting weeks left before the end of the year.

What the scheme would do

The government says the measure is designed to deliver energy security and lower natural gas prices by creating a modest oversupply in the domestic market. Exporters and domestic suppliers have warned that forcing extra gas into the local market could depress prices and discourage investment in exploration.

Western Australia, which already operates a domestic reservation system requiring exporters to offer 15 per cent of production to the local market, is included in the national plan, while the Northern Territory is largely exempt. Existing overseas contracts would remain unaffected under the current design.

The bill was introduced on 14 October, following a government review of the gas market. Its progress through the Senate will be closely watched by producers, manufacturers and households facing high energy costs.