Australia Opts Against Gas Export Controls for Q3 2026 Following Supply Assurances

The Australian Government has formally decided against imposing emergency controls on natural gas exports for the third quarter of 2026. This decision follows comprehensive assessments from industry regulators and assurances from major energy producers that the domestic market on the east coast is well-positioned to meet demand throughout the winter months. Minister for Resources and Northern Australia Madeleine King confirmed the position on Friday, May 15, 2026, stating that intervention under the Australian Domestic Gas Security Mechanism (ADGSM) is not necessary at this time.

The determination provides a degree of certainty for Australian households and industrial gas users as the nation enters the high-demand winter period. The decision to forgo export restrictions was reached after the Department of Industry, Science and Resources analysed updated data regarding supply levels and projected consumption. This analysis was supported by assessments from the Australian Competition and Consumer Commission (ACCC) and the Australian Energy Market Operator (AEMO), both of which confirmed that the east coast gas market possesses sufficient volumes to avoid a deficit between July and September.

Assessment of Domestic Supply and Storage

A primary factor in the government’s decision is the current state of gas storage facilities across the east coast. These facilities are presently at or near 100% full capacity, providing a significant buffer against potential spikes in demand or unexpected supply disruptions. Furthermore, LNG exporters have provided formal assurances to the Australian Government that they will prioritise the domestic market to ensure that sufficient gas is available to meet all local requirements through the third quarter of 2026.

This outlook represents a shift from earlier in the year. In April 2026, Minister King issued a notice of intent to consider activating the ADGSM. This move was prompted by an ACCC forecast which suggested a potential east coast gas shortfall of 12 petajoules (PJ) for the third quarter. However, the latest projections indicate the market could instead see a 3 PJ surplus, depending on the volume of uncontracted LNG exports diverted to the domestic grid. The improvement in the supply outlook is attributed to increased production commitments and the high levels of inventory currently held in storage.

Market Pricing and Economic Impact

While supply volumes appear secure, the cost of gas remains a focal point for the Australian economy. Contracted gas prices for 2026 reached an average of $13.55 per gigajoule (GJ) during the final quarter of 2025. This figure represented a 4% increase in contracted gas prices for 2026 compared to previous periods. The government’s decision not to restrict exports is intended to maintain a balance between supporting the domestic economy and upholding Australia's reputation as a reliable international energy supplier.

The Bureau of Meteorology has also contributed to the current supply confidence with a forecast for a warmer than average winter across much of Australia. A milder winter typically results in reduced domestic gas demand for heating, further easing the pressure on the east coast grid. Despite this favourable forecast, the government remains vigilant regarding the ongoing conflict in the Middle East, which continues to influence global energy market volatility and reinforces the necessity of domestic supply security.

Long-term Policy Frameworks

Looking beyond the immediate winter period, the Australian Government is preparing for the implementation of more permanent structural changes to the gas market. A new domestic gas reservation scheme is scheduled to commence on . Under this programme, gas exporters will be required to divert to the Australian domestic market. This policy is designed to provide a long-term solution to supply concerns and mitigate the need for ad hoc interventions under the ADGSM in future years.