Korea giant fuming over $60bn spoiler

By the Editorial Team · Friday, September 25, 2026

Kogas Australia has raised serious objections to the Australian government's proposed policy reserving up to 20 percent of LNG exports for domestic use, arguing it breaches existing contracts and threatens its $60 billion investment in the Gladstone LNG project. The policy has also prompted concerns from Santos and Senex Energy that it could deter investment, disrupt supply stability, and impact future gas development projects across the country.

Kogas Australia, a major overseas investor in Australian liquefied natural gas (LNG), has expressed significant concerns about the Australian government’s proposed domestic gas reservation policy. The policy, introduced by the Labor government, aims to reserve up to 20 percent of LNG exports for domestic consumption to increase local supply and reduce prices.

Kogas Australia, which holds a 15 percent stake in the Santos-led Gladstone LNG (GLNG) project in Queensland, warned that the draft legislation fails to respect existing contractual agreements signed when the joint venture was established in 2010. The company’s head of legal, Lee Yoon, said the proposed policy contradicts the original investment rationale and raised "grave concerns" over its potential effects.

The initial agreement between Kogas and GLNG was valued at approximately $60 billion, with Kogas as the world’s largest LNG importer. The company is worried the government’s intervention would disrupt long-standing commitments and undermine the commercial terms that supported its investment in Australia’s east coast gas market.

Santos, GLNG’s lead partner, also raised doubts about the reservation plan’s impact during a recent energy forum. The company indicated it might reconsider or even cancel the $3.6 billion Narrabri gas development project in New South Wales, citing fears that mandated domestic gas volumes could significantly depress prices and render the project financially unviable.

In addition, Senex Energy, a prominent domestic gas producer partially owned by billionaire Gina Rinehart and Korea’s Posco, cautioned that customers are postponing contract negotiations while anticipating cheaper gas entering the market due to the reservation policy. Senex warned that this hesitation could stymie investment, as uncertainty over future gas prices complicates producers’ ability to secure long-term supply agreements and invest in new projects.

The industry feedback highlights the uncertainty and potential market disruption stemming from the proposed policy, even before any reserved gas is redirected for domestic use. Producers fear that mandated volumes at lower prices might discourage private investment, affecting future gas supply reliability and potentially hindering the broader energy transition goals.

The Albanese government’s draft legislation remains under consultation, with key industry stakeholders continuing to debate the balance between securing affordable domestic gas supplies and maintaining a stable investment climate for LNG exporters.

This article was reported by synthesizing coverage from multiple independent news outlets to present a balanced, unbiased account. Read about our editorial standards. Spotted an error? Let us know.