Plans under way to extend the ADGSM

5th July 2022 By: Esmarie Iannucci - Creamer Media Senior Deputy Editor: Australasia

PERTH ( – The federal government is looking to extend the Australian Domestic Gas Security Mechanism (ADGSM) until 2030 to ensure the mechanism is available to help secure ongoing domestic gas supplies in the next decade.

Minister for Resources and Northern Australia Madeleine King said the existing ADGSM was an important tool that the government could use to ensure ongoing security of Australia’s domestic gas supplies, but that it had some clear shortcomings. It is currently due to expire at the start of January 2023.

King previously announced a separate review of the ADGSM to ensure the mechanism is fit for purpose.

The ADGSM was introduced in 2017 in response to a forecast gas supply shortfall in the eastern domestic gas market, and allows the government the ability to restrict liquefied natural gas (LNG) exports to secure domestic supply.

A 2020 statutory review to assess if the ADGSM was still fit-for-purpose found that the mechanism had been working effectively to safeguard domestic gas supplies.

This current consultation is on the extension of the existing ADGSM as required by law.

“The government is committed to ensuring affordable, reliable and secure energy for Australian households and businesses,” King said.

“We are opening public consultations on extending the ADGSM to January 1, 2030, to ensure the government continues to have access to the emergency mechanism to reserve gas for domestic supply in times of a supply shortfall.

“The extension will ensure we continue to have the mechanism available to us while we review how the ADGSM can be improved.

“The current ADGSM is a complex mechanism that would, if invoked, take a long time to produce results. The government is determined to make sure the ADGSM can work as an effective tool to enable Australians to have access to affordable energy.”

The government would also renegotiate the heads of agreement with east coast LNG producers, said King.

The Minister will hold top-level meetings with Australia’s major gas suppliers during the consultations, as well as key international counterparts.

“Australia remains a long-term and reliable supplier of resources and energy, and is a crucial supplier of LNG to our trading partners in north Asia. We remain committed to contributing to global energy security and working with international partners to address current global challenges,” King said.

“I will continue to work with industry and market bodies to seek solutions to current challenges facing the east coast gas market.”