Australian LNG producers are concerned about diverting exports to meet natural gas shortages in the country’s east coast market under recently proposed changes to the Australian Domestic Gas Security Mechanism (ADGSM).

The latest changes to the ADSGM would allow the federal government to activate the mechanism and impose liquefied natural gas export restrictions more frequently. The mechanism may be activated on a quarterly basis, rather than on an annual basis, and extends the ADSGM expiration to 2030.

“If the mechanism is triggered, LNG producers would now have to seek permission to export gas during any quarter that is forecasted to have a shortfall of gas supply, “ said law firm White & Case LLP.  Proposed ADSGM changes are to take effect April 1.

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