The second-stage expansions of multibillion-dollar export gas projects being developed in Queensland will involve either consolidation or co-operation between existing players, British Gas says.
"The next wave [of projects] will see co-operation," the chairman of BG Australia, Catherine Tanna, said on Wednesday at an Australian Financial Review luncheon in front of shareholders in two of the other Queensland projects, Origin Energy and Santos.
Along with a project in Queensland, BG is also developing an export gas project in Canada. If competitors go down the consolidation or co-operation path, "we will have to follow", Ms Tanna said.
"Australia has enormous opportunity to be part of that next wave," Origin managing director Grant King told the luncheon.
"The projects are going to happen ... those conversations [between shareholders in rival projects] are happening."
Earlier optimism that Origin would proceed with a phase-two expansion of its Asia-Pacific LNG project has faded for now amid investor caution over bringing the initial development on stream and within budget.
Growth in global gas demand will run at 2.6 per cent annually between now and 2025, Ms Tanna said, with growth in gas supplied from export projects to expand at an annual average of 5 per cent.
"The market today is pretty tight ... Australia's projects will bring the market back into balance," Ms Tanna said. "The market will be tighter for longer. Demand from Asia is very, very strong."
A 1 per cent rise in China's gas demand would equate to the tonnage of two of the three Queensland projects being developed, Ms Tanna said, highlighting the importance of Asian demand for gas, along with the prospect that the region could soak up even more gas from Australia.
BG has four export gas projects on the drawing board globally, with projects in east Africa and the US along with the plans for Queensland and Canada.
Not all would proceed, Ms Tanna said, since within BG there was competition to see which would go forward. BG's Queensland project was a "brownfield" development, which may suggest it is cheaper to bring on stream.
In the domestic energy market, in some states electricity prices have been pushed sharply higher in recent years due to heavy spending on network upgrades, while the cost of renewable energy now accounts for close to one-third of electricity bills.
The carbon price was expected to eventually take over from the renewables target, Mr King said, but this is not now likely to occur.
The low carbon tax, which will fall further once the floor is removed from mid-2014, has served to push up the relative cost of renewable energy sources.
"They were to converge but they are diverging," he said.
This means the approach to the 20 per cent renewable energy target may need to be rethought.
EnergyAustralia managing director Richard McIndoe said he doubted the government had a "social licence" for the policy being pursued with regard to renewable energy, predicting "there will be a change in the legislation" at some point.