On 6 June, the Commonwealth Government released, for
consultation, the draft regulation and guidelines for its proposed
new control of LNG exports - the Customs (Prohibited Exports)
Amendment (Liquefied Natural Gas) Regulation 2017 and
Customs (Prohibited Exports) (Operation of the Australian
Domestic Gas Security Mechanism) Guidelines 2017. The
Regulation is set to come into effect on 1 July 2017.
In accordance with prior indications, the regime looks to solve
shortfalls not on the basis of "all hands to the pump",
but by effectively penalising Projects that could be regarded as
"at fault". LNG Projects taking gas from the domestic
market will be stopped from exporting the amount of LNG which
equates to the domestic gas shortfall, irrespective of their export
contract commitments. Presumably, this gas is redirected to the
domestic market. Projects which are "net contributors" to
the market (that is selling more gas into than they are taking out
of the market) will
