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Shell calls Australia's gas reserve plan a 'sledgehammer' that risks market failure
Analysts say loopholes could let Santos’ GLNG avoid some domestic gas obligations, despite a plan to reserve up to 20% for local buyers.
The Albanese government released a draft plan last month requiring gas exporters to reserve up to 20% of production for the domestic market, though observers warn loopholes could allow the Gladstone LNG project to escape obligations.
Critics argue GLNG built a 7.8 million tonne capacity plant without sufficient local gas, subsequently exporting the equivalent of 20% of eastern Australia's domestic demand over the past 10 years.
Australian Workers Union national secretary Paul Farrow criticized "Santos-sized loopholes," arguing the draft lets Adelaide-based Santos count contract extensions as "existing contracts" exempt from reservation requirements.
The Chinese embassy urged Canberra to ensure fair treatment compared with other foreign investors, while Shell Australia chairwoman Cecile Wake condemned the intervention as a "sledgehammer to crack a nut."
Analysts warn the policy's stipulation that producers must supply 110% of east coast demand remains highly contested, with concerns that special treatment could shift the proposal toward a restrictive spot cargo policy.