New reforms coming into force today will ensure Australian homes, small businesses and heavy industry can count on Australian gas to meet their needs while also adding protections for long-term contracts with international trading partners.
Minister for Resources and Northern Australia Madeleine King said reforms to the Australian Domestic Gas Security Mechanism (ADGSM) give the government more flexibility to use the mechanism, if needed, in the event of a material forecast shortfall in domestic gas supplies.
But the changes also strengthen protections for international investors with long-term contracts with key export markets such as Japan, South Korea, and Malaysia.
"The changes will deliver more flexibility and mean decisions to activate the ADGSM to secure domestic gas supplies can be made every quarter, rather than only once a year under the old regulations," Minister King said.
"The changes follow extensive consultations with industry, stakeholders, export partners and the public, which led to improvements in the design and operational effectiveness of the ADGSM.
"The reforms balance the need to guarantee sufficient domestic gas supply while also safeguarding Australia's global reputation as a stable and reliable supplier of energy to our export markets.
"Ultimately, it is in everyone's interests -producers, suppliers, users, and investors - for the domestic gas market to remain well-supplied.
Minister King said the changes were needed because the ADGSM, as designed by the previous government, was not suited to deal with the energy crisis that emerged in 2022 and ongoing gas market volatility.
These changes to the ADGSM complement the other measures the Government is taking to improve energy security, reliability and affordability including:
- A new Heads of Agreement with East Coast LNG Exporters to prevent a gas supply shortfall - delivering an additional 157 petajoules of gas to the east coast market in 2023
- Establishing a new mandatory Code of Conduct to ensure Australian gas users have access to Australian gas at reasonable prices.
- Extending the ACCC's Gas Inquiry to 2030.
- the Australian Energy Market Operator (AEMO) will have extended powers to intervene and respond to gas system security concerns and manage volatility.
- Improving the Australian Energy Regulator's monitoring and compliance role to ensure gas suppliers and pipeline providers are acting in the best interests of consumers.
