Article by Damon Kitney, courtesy of The Australian.
10.09.2025
Australia’s position as a reliable supplier of liquefied natural gas to Asia’s booming economies is facing unprecedented challenges amid regulatory uncertainty, tightening gas supplies and new competitors entering the market.
Energy exporters have built strong and enduring relationships with some of the country’s closest trading partners in the Asia-Pacific.
Exports primarily to Japan, China, South Korea and Taiwan account for 90 per cent of the nation’s LNG export volumes. Japan takes the most (36 per cent), followed by China (28 per cent), the Republic of Korea (14 per cent) and Taiwan (11 per cent).
Long-term contracts with these countries have provided stability for decades, while Australian LNG shipments reached a record 82 million tonnes in 2024.
In addition to enhancing energy security, the LNG trade from Australia to Asia-Pacific countries has fostered strong economic ties and regional co-operation, while supporting economic growth by providing a reliable energy source for industrial development and urbanisation.
The country’s LNG developments also contribute tens of billions of dollars in export revenue and thousands of jobs, and provide significant domestic gas volumes, particularly in Western Australia, supporting the energy needs of local industry.
Yet while volumes remain strong, industry forecasts suggest a subtle shift this year, driven by changing market dynamics.
Projections for 2024-25 anticipate a gradual decline in Australian LNG shipments to 79 million tonnes annually, signalling that the nation’s previously unchallenged growth in LNG exports may be plateauing.
Chevron Australia president, Balaji Krishnamurthy said Australia’s ability to maintain domestic gas supply as well as LNG exports depended on “a stable fiscal policy and regulatory environment”.
Mr Krishnamurthy said that, without clear and consistent government policy, investment in existing facilities and new offshore fields was not guaranteed.
“When we look to the US, which is now the world’s largest producer of LNG, the business-friendly policies are likely to result in increasing competition for market share as well as investment dollars.
That is because companies, including Chevron, invest in locations where it is easier to do business and where returns are more certain,” he said.
“Countries which offer the most attractive and stable fiscal and regulatory settings will be best placed to secure capital. Investors like Chevron historically have seen Australia as an attractive place for investment, but it should not be taken for granted. Australia’s place on the world stage depends on smart policy choices.”
Paul Everingham, chief executive of the Australia Natural Gas Exporters Association (ANGEA), said energy demand continued to surge across Asia, especially in countries such as India, Indonesia, The Philippines and Vietnam, where it was growing at 5-6 per cent compound annually.
But increasing competition from the US, Qatar, the United Arab Emirates and emerging African producers has put the Australian LNG industry on notice.
“China, Japan, South Korea, Singapore, the established buyers of LNG, are diversifying their supply sources to avoid over-reliance on any single provider,” Mr Everingham said.
“The US is bringing enormous new supply online, with Trump-era approvals accelerating the buildout of LNG infrastructure. Qatar, the UAE and emerging producers in Africa are also expanding capacity. Australia faces more and more competitors.”
This increased supply competition puts pressure not only on pricing but on Australia’s dependability as a supplier. “In my meetings with buyers across Asia, I have been asked pointed questions about the reliability of Australia’s supply and about uncertainty in our regulatory and legislative system,” Mr Everingham said.
He said many Asian governments traditionally valued clear long-term political and policy certainty offered publicly by the highest offices of government. “Beyond the Resources Minister and Trade Minister in Australia, that kind of public certainty has not been forthcoming,” he said.
“From a bipartisan perspective, Australian political leadership needs to reassure buyers that gas will remain part of our future energy mix and that Australia will be a dependable supplier.”
Looking forward, Australia faces a tightening domestic gas supply landscape, particularly on the east coast.
At the same time, some states have introduced more stringent approvals for exploration and production.
Without ongoing investment in upstream projects and supporting infrastructure investments, there are fears Australia could struggle to meet both growing domestic demand and its export commitments, especially during peak periods or in the face of supply disruptions.
Compounding these supply concerns is a growing sense of policy and regulatory uncertainty that hangs over the sector.
Shifting government positions on critical issues such as gas reservation policies, carbon pricing and emissions targets have caused hesitation among LNG project developers.
Inconsistent or unpredictable regulatory signals risk deterring the significant capital investment required to maintain and expand Australia’s LNG capacity.
In an increasingly competitive global market, this uncertainty threatens to undermine Australia’s hard-won reputation as a reliable supplier.
“With abundant resources, talented people and long-standing relationships with key Asian markets, Australia is well positioned to continue benefiting from the development of its gas reserves while also providing energy security to our closest trading partners,” Chevron’s Mr Krishnamurthy said.
“With the right policy settings in place, we have the resources and capability to do both – meet domestic supply and support regional energy security through LNG exports for many decades to come.”
Australia’s advanced net zero ambitions and strong renewables portfolio are world-leading. The country’s emissions have declined substantially over the past two decades, which according to a recent quarterly emissions update from the Department of Climate Change, Energy the Environment and Water is due in part to a transition from coal to gas and renewables, a path many Asian nations still need to follow.
With geopolitical volatility shaking traditional supply chains and energy security emerging as a strategic priority for many countries, Australia has the potential to play an even greater role in delivering stable energy supply to its closest trading partners.
ANGEA is currently working with Japan, Vietnam and The Philippines to bring their emissions down 40 per cent over the next five years by using gas and solar energy.
“Addressing the complex energy issues the world faces today, balancing energy affordability andsecurity with lower carbon aspirations, can’t be done by one country, one company or one industry alone. We need to work together to find solutions,” Mr Krishnamurthy said.
“The pace of energy transition will vary around the world based on each country’s priorities. Natural gas is a viable option to strike the right balance, especially for our neighbours in Asia who aren’t blessed with the natural advantages that Australia has.”
‘Australia is well positioned to continue benefiting from the development of its gas reserves’
Balaji Krishnamurthy,
Chevron Australia President