Article by Damon Kitney, courtesy of The Australian.
23.09.2025
Australian policymakers risk undermining the nation’s most important trade and investment relationships if they fail to value liquefied natural gas (LNG) as an important strategic asset, central to how the nation’s most important partners in North Asia view their long-term energy security.
In an era of uncertainty and geopolitical volatility, Perth USAsia Centre chief Gordon Flake said Japan and Korea remained two of Australia’s most important like-minded partners in the Indo-Pacific region.
Japan has been a cornerstone investor in Australia’s LNG industry since the North West Shelf project began shipping gas in 1989, while Korean firms such as POSCO have provided crucial capital and offtake agreements to underpin both LNG and iron ore developments.
“My advice to governments is to think globally. The local is a mirage. Without Japan, we have no iron ore industry.
“Without Japan and Korea, we would not have the resource sector we have today, and we would not have the prosperity we enjoy,” he said.
“In every way, our status as a natural resource superpower — from legacy resources like iron ore to current essential resources like LNG, to future resources like critical minerals and renewables — is tied to Japan and Korea.”
Professor Flake, who founded the Perth USAsia Centre in 2014 and is a long-time observer of Indo-Pacific strategic trends, said too many in political and business circles in Sydney and Melbourne failed to appreciate LNG’s strategic importance to the nation.
“I understand the tendency in Victoria or New South Wales to view energy in a bubble, focused on climate change and domestic consumption,” he said. “But if we step back, our ability to provide reliable and — a word that’s not discussed nearly as much as it should be — flexible energy options to partners like Japan and Korea, is essential.”
He further explained that LNG was the “flexible backstop” supporting the transition from legacy energy sources to renewables.
“In Japan and Korea, their willingness to invest in renewables and carbon capture depends on confidence they can switch on power when needed. Nuclear can’t be turned on and off. Coal plants take time. Gas can be switched within hours,” he said.
In this context both Japan and Korea have grown increasingly anxious about continuity of supply from Australian LNG producers, amid federal policy debates over climate and gas approvals. Australia’s emerging Carbon Capture and Storage (CCS) industry, he added, was also deeply dependent on international demand and capital.