SYDNEY - The Australian government said on Monday it will consider creating a gas reservation on the country's east coast as part of a sweeping review of market rules to prevent supply shortages.

The competition regulator has warned of looming shortfalls for the country's populous east coast, with the latest forecast pointing to a gap by 2028 without new investment. Most reserves are located in the remote northwest.

Australia, which exports more gas than it consumes, is also keen to maintain its reputation as a major reliable exporter of liquefied natural gas (LNG) and that will be a major aim of the review.

Market regulations under review include export controls, a mandatory code governing sales of the fuel on the east coast and government agreements with major producers.

"It's critical that we use this review to get the settings right in our gas market, ensuring we are securing affordable Australian gas for Australian use, while remaining a reliable energy exporter and delivering lasting energy security in our region," Climate Change and Energy Minister Chris Bowen said in a statement.

Prime Minister Anthony Albanese's centre left government sees gas as playing a role beyond 2050 as the country moves rapidly away from its dependence on coal-fired power stations.

The review will examine the "effectiveness and coherence" of the current rules, identify improvements and consider consolidating rules to create a more "stable regulatory environment" for investors.

Areas of focus include supply security, pricing, transparency, market conduct, and the impact of regulations on the competitiveness of Australia's LNG export industry.

Speaking about the potential for a gas reservation, Bowen told a news conference that any new requirements would be "prospective" without "ripping up existing contracts".

Some of the government's policies have come under fire from industry players. In particular, it introduced caps on wholesale prices in 2022 to keep energy prices down in the wake of Russia's war on Ukraine. The price cap has since been incorporated into the mandatory industry code of conduct.

Japanese LNG importers, some of Australia's biggest customers, have told Reuters that the Labor government's policies have increased supply uncertainty and hiked costs at gas facilities in which they have stakes.

Major gas producers, including Shell, which exports gas from the Queensland Curtis LNG project, and ExxonMobil, which produces gas in the Bass Strait, have also been critical.