Shell calls Australia's gas reserve plan a 'sledgehammer' that risks market failure

SYDNEY, Oct 13 (Reuters) — Energy major Shell on Tuesday criticised the Australian government's plan to force liquefied natural gas producers to reserve a portion of their output for domestic use, calling it a "sledgehammer to crack a nut" for an already functional market. The government is set to introduce legislation this week to parliament to implement its new domestic gas reservation policy to address supply shortfalls and bring down energy prices. Cecile Wake, chair of Shell Australia, which exports gas ⁠from the Queensland Curtis LNG project, said that while she did not oppose the concept of a domestic gas reserve, there were major flaws in the current policy's design. "Fundamentally, it's a sledgehammer to crack a nut. And it is an extraordinarily heavy-handed intervention into a market that is actually working well," she told a conference in Sydney. Shell, along with Origin Energy and Santos, would be most affected by the reservation scheme as operators of the three LNG export projects on the east coast. The draft proposal requires energy exporters to reserve up to one-fifth of their production as determined by the energy regulator from January 1, 2028 to deliberately overs