# Australia Clashes With Asian Energy Giants Over Gas Export Crackdown New domestic reservation rules threaten long-term export contracts and foreign investment stability. - **Source:** [Sydney Morning Herald - Business](https://www.smh.com.au/rss/business.xml) - **Published:** 2026-10-18 - **Topic:** [Business](https://brifing.si/c/business) - **Original article:** - **On Brifing:** https://brifing.si/s/37e1df9b-8cbf-416d-9ada-030d2b63f727 ## Legislative Shift in Energy The Australian government introduced a bill requiring LNG exporters to reserve 20 percent of annual volumes for domestic use starting in 2028. This policy aims to address rising local power and manufacturing costs. By forcing this supply shift, the government seeks to mitigate the impact of soaring energy prices on Australian households. ## Contractual Protection Disputes While the government promised to honor contracts signed before December 22, 2025, the new bill excludes future renewals or extensions from these protections. This stance directly contradicts the expectations of major Asian energy partners. These companies argue that extension options were integral components of their original, long-term investment terms and agreements. ## Asian Investors Express Alarm Major foreign investors, including Japan’s INPEX and Korea’s KOGAS, have formally expressed significant concern regarding the legislation. They argue that failing to protect contract extensions undermines the fundamental principle of safeguarding historical investment decisions. KOGAS, a key stakeholder in the Gladstone LNG terminal, specifically requested that protections cover all automatic extension periods. ## Government Stance on Renewals Resources Minister Madeleine King maintains that any decision to extend an existing contract constitutes a new commercial agreement. Consequently, these extensions fall outside the scope of transitional protections. The government asserts that companies making such decisions after the specified date do so with full knowledge of the domestic gas reservation scheme. ## Operational Impact on Terminals The policy will most heavily impact Queensland’s Gladstone export terminals, operated by Shell, Origin Energy, and Santos, alongside Northern Territory operators. Unlike Western Australia, these regions previously operated without local reservation constraints. Producers now face a mandatory sell obligation, raising concerns about potential forced participation in uncommercial deals to meet compliance. ## Domestic Industry Perspectives Manufacturing Australia supports the bill, noting that local gas prices have tripled over the last decade. They argue the intervention will create a more balanced market and reduce exposure to international price volatility. Supporters believe this legislation is essential to ensure Australians pay a fairer price for the nation’s abundant energy resources. ## Supply Shortfall Risks Energy authorities warn that Victoria and New South Wales could face significant supply shortfalls by the end of the decade. This risk is driven by the rapid decline of ageing oil and gas fields in the Bass Strait. Without new supply sources, the domestic market remains vulnerable to high prices and limited availability. ## Market Analyst Skepticism Analysts like Rick Wilkinson of EnergyQuest caution that the policy may offer little immediate benefit to domestic supply. Since there is currently no surplus gas available to reserve, the real impact may only materialize when current export contracts begin rolling off in the 2030s. Considerable debate is expected before the bill passes. ## Sources covering this story - https://www.smh.com.au/business/companies/australia-clashes-with-asian-energy-giants-over-gas-export-crackdown-20261019-p61685.html?ref=rss&utm_medium=rss&utm_source=rss_business — --- _Summary written by Brifing from the original reporting. Copyright in the original article belongs to its publisher; read the full piece at the link above._