Australia introduces gas-reservation bill amid tension with Asian energy partners

The Australian government has introduced a domestic gas-reservation bill to parliament, aiming to lower local heating, power, and manufacturing costs by mandating that large liquefied natural gas (LNG) exporters set aside up to 20 per cent of their annual export volumes for domestic customers starting in 2028.

While the Albanese government pledged to respect existing long-term contracts signed on or before December 22, 2025, the legislation stipulates that any contracts renewed, extended, or rolled over after that date must comply with the new rules. This provision applies “regardless of whether the right to renew or extend the contract existed when the contract was entered into”.

This policy has sparked tension with major Asian energy partners, particularly Japan and South Korea. State-backed energy companies in those nations argue that built-in extension options are integral to their original investment terms and should be honored. Other major Australian LNG customers potentially affected include Malaysia and China.