China's Australian LNG Resale Bonanza Raises Domestic Gas Prioritization Concerns

Australia's liquefied natural gas (LNG) exports to China have raised concerns about prioritizing domestic users. The Queensland government expressed worries about the federal counterpart's proposed domestic gas reservation policy, which would redirect some LNG production from exports to the domestic market in eastern Australia.

The Institute for Energy Economics and Financial Analysis (IEEFA) found that China has been reselling large volumes of Australian LNG for a profit over the past five years. In 2025 alone, IEEFA estimated that China resold 17-19 million tonnes (Mt) of LNG, sourced largely from Australia, the US, and other global suppliers.

This volume is roughly equal to China's total LNG imports from Australia in 2025, which were 20.6 Mt. The estimated Chinese LNG resales from global suppliers are equivalent to 925-1,034 petajoules (PJ), more than double eastern Australia's domestic gas consumption of 481 PJ in the same year.

The resales are driven by a mismatch between China's plateauing LNG demand and its growing contract portfolio. The top end of the estimate corresponds to the contracting surplus in 2025, or the difference between total contracted volumes and actual LNG imports into the country.