{"id":63739,"date":"2026-07-25T10:13:01","date_gmt":"2026-07-25T10:13:01","guid":{"rendered":"https:\/\/www.europesays.com\/japan\/63739\/"},"modified":"2026-07-25T10:13:01","modified_gmt":"2026-07-25T10:13:01","slug":"korea-japan-sound-alarm-on-labors-domestic-gas-reserve-plan","status":"publish","type":"post","link":"https:\/\/www.europesays.com\/japan\/63739\/","title":{"rendered":"Korea, Japan sound alarm on Labor\u2019s domestic gas reserve plan"},"content":{"rendered":"

In addition, they say the policy could damage Australia\u2019s reputation as a reliable supplier of liquefied natural gas and a stable destination for foreign investment.<\/p>\n

Submissions from Korea\u2019s state-owned gas importer KOGAS, alongside leading Japanese and Korean business organisations, warn the Albanese government must preserve confidence in Australia\u2019s longstanding export commitments, as it prepares legislation requiring LNG exporters to reserve up to 20 per cent of exportable production for the domestic market from July next year. <\/p>\n

The submissions reveal the gas reservation debate has spread well beyond the national energy sector, with organisations representing Australia\u2019s two largest LNG customers warning the policy\u2019s consequences could extend into trade, investment and broader strategic ties. <\/p>\n

Japan and South Korea have invested billions of dollars in Australia\u2019s LNG industry over decades and have become increasingly important strategic partners as Canberra deepens economic and security ties across the Indo-Pacific.<\/p>\n

The Australia-Japan Business Co-operation Committee, whose members include Mitsubishi, Mitsui, Sumitomo Corporation, JERA and other major Japanese investors, said the proposal was \u201cof considerable significance to the Australia\u2013Japan relationship\u201d. <\/p>\n

It noted Australia supplies about 40 per cent of Japan\u2019s gas requirements and warned the relationship had been built on \u201cconfidence and trust built through decades of partnership and stable, uninterrupted supply\u201d. <\/p>\n

The committee said it welcomed government assurances Australia remained committed to being \u201ca reliable supplier of energy to its international partners\u201d, but cautioned \u201cit is essential \u2026 that these intentions are clearly reflected in the detailed design and practical implementation of the policy\u201d. <\/p>\n

It added feedback from industry participants indicated \u201cfurther work, consultation and engagement is required before confidence can be established\u201d. <\/p>\n

It also warned policy changes affecting existing investments and contractual arrangements \u201crequire particular care and close consultation\u201d because, if handled poorly, they could affect \u201cnot only the investments and contracts directly concerned, but also broader perceptions of Australia\u2019s investment climate\u201d. <\/p>\n

The committee noted Japanese institutions have financed more than $10bn of Australian LNG projects and said confidence in Australia\u2019s investment framework would also influence future investment in critical minerals, hydrogen and other strategic industries. <\/p>\n

The Australia-Korea Business Council delivered a similar warning, arguing recent instability in the Middle East had reinforced the importance of trusted energy partnerships.<\/p>\n

\u201cThe Australia\u2013Korea energy relationship is not a one-way arrangement in which Australia exports energy security to Korea,\u201d the council said. \u201cIt is a genuine two-way strategic partnership built on mutual trust, long-term investment and reciprocal energy security.\u201d <\/p>\n

The submission noted Australia supplies about one-quarter of South Korea\u2019s LNG imports, while South Korea supplies about one-quarter of Australia\u2019s diesel requirements<\/a>, underscoring the strategic importance of the bilateral relationship.<\/p>\n

It urged the government to \u201ccarefully consider how the domestic gas reservation scheme may be perceived by one of Australia\u2019s closest energy and investment partners\u201d, warning: \u201cIf the scheme is seen as reducing confidence in Australia\u2019s long-term commitment to honouring LNG export arrangements or providing a predictable investment environment, it risks weakening the trust that has underpinned bilateral energy co-operation for decades.\u201d <\/p>\n

It said the consequences could extend beyond LNG to \u201cbroader Australia\u2013Korea investment flows and the reciprocal energy security partnership upon which both countries increasingly rely\u201d. <\/p>\n

Korea Gas Corporation, one of Australia\u2019s largest LNG buyers and South Korea\u2019s state-owned gas importer, also warned the government against measures that could undermine long-term contractual certainty, arguing Australia\u2019s standing as a dependable LNG supplier had been built over decades of stable policy and reliable exports. <\/p>\n

Similar concerns were raised by the Institute of Energy Economics, Japan, which said maintaining Australia\u2019s reputation as a reliable supplier was critical to preserving future Japanese investment in the country\u2019s LNG sector. <\/p>\n

The submissions come as the Albanese government finalises legislation designed to increase domestic gas supply and lower prices by requiring LNG exporters to reserve part of their production for Australian customers. <\/p>\n

While gas producers argue the proposal risks deterring future investment<\/a> and manufacturers have largely welcomed stronger government intervention<\/a>, the consultation has also exposed growing concern among Australia\u2019s closest regional partners over the international consequences of the reforms.<\/p>\n

For Tokyo and Seoul, the issue extends well beyond domestic gas prices. Both argue decades of strategic co-operation have been built on Australia\u2019s reputation for honouring long-term commercial commitments and providing a stable investment environment. Their message to Canberra is that preserving affordable domestic gas should not come at the expense of the confidence that has underpinned some of Australia\u2019s most important economic and strategic relationships.<\/p>\n

Read related topics:Energy<\/a>\"Colin<\/a>Colin Packham<\/a>Business reporter<\/p>\n

Colin Packham is the energy reporter at The Australian. He was previously at The Australian Financial Review and Reuters in Sydney and Canberra.<\/p>\n","protected":false},"excerpt":{"rendered":"In addition, they say the policy could damage Australia\u2019s reputation as a reliable supplier of liquefied natural 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