The Australian Domestic Gas Security Mechanism (ADGSM) is in place to ensure there is a sufficient supply of natural gas to meet the forecast needs of energy users within Australia.
If LNG projects’ use of domestic gas results in a supply shortfall in a domestic market, those projects may be required to limit their exports or find new gas sources.
The Minister for Resources and Northern Australia is responsible for making the decision as to whether a shortfall market exists. The decision is informed by expert advice from:
- Australian Energy Market Operator (AEMO)
- Australian Competition and Consumer Commission (ACCC)
- industry and other government sources
Our department provides advice to the Minister on policies and processes relevant to the Act and regulations.
The ADGSM sits within Division 6 of the Customs (Prohibited Exports) Regulations 1958.
Details about the operation of the ADGSM are in the Customs (Prohibited Exports) (Operation of the Australian Domestic Gas Security Mechanism) Guidelines 2017.
The ADGSM came into effect on 1 July 2017.
Operations and processes
The Minister follows the Stepped Process and Timeframes for the ADGSM [548KB PDF].
Steps may include:
- the Minister issues a notification of intent to consider whether to determine a shortfall year
- the Minister seeks industry and government stakeholder views about proposed LNG exports and the Australian gas market
- the Minister may make a determination as to whether export controls will apply
- any decision is made public with a statement of reasons
- LNG companies provide feedback
- export permissions may then be finalised
Restrictions will only apply if the Minister determines a shortfall year.
The ADGSM is designed to allow the Minister to take into account the availability of an industry-led solution which will provide more gas to the domestic market in an identified shortfall year.
Review of the Australian Domestic Gas Security Mechanism
The government has brought forward the scheduled review of the ADGSM.
We are currently seeking public submissions on our Consultation Hub.