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Gas expansion under threat if Australia fails to keep up

AUSTRALIA stands to make enormous gains from coal seam gas, but a key industry figure warns Queensland has already lost one gas expansion project worth more than Australia's entire sugar industry.

Rick Wilkinson is the chief technical officer for oil and gas lobby group the Australian Petroleum Production Exploration Association.

As part of a panel discussion at the Queensland Major Projects Conference on Thursday, Mr Wilkinson was asked about the threat of international gas competitors to Australia, particularly the United States' ability to manufacture cheaper energy in the form of shale gas.

Mr Wilkinson said the $60 billion in gas projects being built on Curtis Island at Gladstone were akin to "building the North West Shelf" in just a few years.

"When those projects start, the export revenue from Curtis Island will be more than all the beef and wheat exports of Australia," he said.

"It will move the dial of Australia's economy."

The Curtis Island projects - Gladstone LNG, Queensland Curtis LNG and Australia Pacific LNG - pull gas from wells in south-west and central Queensland and process it for export.

With gas deals already done in advance, there was little threat to current projects, but Mr Wilkinson said expansion plans were not quite so solid if Australia failed to keep up.

"Just quietly, a year or two ago, one of the investors on a third train (production plant) moved it to the United States," he said.

"One train, able to produce more revenue than the sugar industry of Australia, was moved quietly to the US."

To emphasise the speed of Australia's competition in gas, Mr Wilkinson pointed to an American gas reserve which was only discovered in 2008.

He said it now produced more gas than the entire industry in Australia.

"That's the rate at which our competitors are moving," he said.

"And that's why we need to find out what our next markets will look like so we can move quickly."