New Australian projects have been getting approved at a furious pace, with six kicked off in the past 18 months. About $180 billion worth of LNG export projects are now being built, putting the country on track to quadruple its LNG exports by the end of the decade.

With the recent approval of the $34 billion Ichthys project, Australia should also overtake Qatar as the world's top exporter of LNG by around 2017, but the window of opportunity for the giant projects appears to be closing.

"There's vastly more being offered into the pipeline now – from the United States, Russia, Canada – and so the whole supply perspective has changed and Australia now looks very vulnerable," said Tony Regan, an analyst with Tri-Zen International in Singapore.

Japan's Inpex Corp and France's Total last week approved the 8.4 million tonne-per-annum capacity Ichthys project in the Browse Basin offshore Western Australia.

But hotter overseas competition and higher costs are likely to discourage approval of new mega projects.

EXPANSIONS MORE LIKELY

Instead, expansion in Australia is likely to take place at existing facilities, or brownfield projects.

The only other project expected to be given the green light this year is an expansion of Origin Energy and ConocoPhillips' Australia Pacific LNG project.

"The one big greenfield opportunity that still remains is Browse. After that, in the main, you're looking at brownfield expansion," said Craig McMahon, a Wood Mackenzie analyst in Perth, referring to Woodside Petroleum's Browse LNG project.

But prospects are dimming for Browse, which saw a final investment decision pushed back by a year to mid-2013 as costs escalate, some analysts say.

"Unless they can demonstrate that they can control costs, something like Browse looks particularly vulnerable," Tri-Zen's Regan said.

The costs of Australian LNG projects are notoriously high and Woodside's $A14.9-billion Pluto LNG project, which is expected to come online in March, was delayed by one year and came in about $1 billion over-budget.

Australian LNG projects typically come in with costs between $6 and $8 per million British thermal units (mmBtu), while most non-Australian projects cost less than $6 per mmBtu.

In addition, some analysts estimate that Australian LNG projects are typically delayed nine months to a year and come in around 15 per cent over budget.

With cheaper projects available, particularly in the United States, and credit tightening globally, financiers are unlikely to have as much appetite for pricey Australian gas ventures, experts say.

In addition, Australian LNG developers face an extremely high-cost labor market as well as a recently approved carbon tax, which analysts say will initially have a minor impact on the bottom line, but will inevitably erode profit margins, particularly projects that have a high carbon dioxide content in the raw gas.

"When you consider the magnitude of the development costs associated with these projects, the carbon tax quickly becomes insignificant by comparison," Wood Mackenzie's McMahon said.

"Whilst it clearly does not help, I think it's very unlikely that the carbon tax would ever break a project."

The carbon tax starts with a fixed price of $A23 from July before full emissions trading from July 2015. LNG projects will get free carbon permits covering at least half their carbon liability.

Deutsche Bank, in a note to clients on Friday, estimated that the Ichthys project would still face average annual carbon costs of $70 million for a $20/tonne carbon price and $105 million for a $30 price.

COST BLOW-OUTS

Riding the boom in gas export projects, the country's oil and gas workers are the world's highest paid, raking in more than $140,000 a year, or almost twice the world average of about $76,000 for the sector, according to an industry poll last year.

Ratings agency Fitch gave a negative outlook for Australia's oil and gas industry this week, and highlighted concerns that LNG projects in particular would not be able to come online on time and on budget.

"Announcements of project cost blow-outs and schedule delays will only increase as more projects progress towards the back-end of their development period," Sajal Kishore, a director in Fitch's Energy & Utilities team, said.

"Funding can become more difficult with increasing project execution risks, which may result in a deferral or cancellation of some proposed projects," Fitch said.

Inpex Corp's Ichthys project, in particular, may have a challenge meeting its large debt requirement after an increase of 70 per cent in Ichthys' price tag to $34 billion from its original $20 billion cost, banking sources say.

Banks affected by Europe's debt crisis in particular are less keen to fund huge projects, although in this case Japanese banks and Australian banks are expected to step up and support financing, the sources said.

LINING UP FOR US SUPPLIES

The sudden rise of the United States as a gas exporter rather than an importer is one of the main threats to the viability of new Australian projects.

The United States, once expected to become a significant gas importer, is now rapidly developing LNG export facilities to sell off some of the shale gas that has flooded the market in recent years.

US gas prices are under $3 per mmBtu, a fraction of what Asian buyers pay, with spot LNG prices around $15.75 per mmBtu in the region.

Asian customers are eagerly eyeing US projects and some have already made large commitments.

For instance, Cheniere Energy has filled nearly all its capacity for the first US export plant, after deals signed with BG Group, Gas Natural Fenosa and GAIL India, and has already proposed a second plant.

"You can see from the size of the buys how dead keen those buyers are to get their hands on US LNG. They are not dabbling, they want to grab it. It's not good for the Australian projects," said Noelle Leonard, a consultant for FACTS Global Energy in Perth.

But some experts said export plans could be derailed as some US lawmakers questioned the wisdom of increasing exports at the risk of higher domestic prices.

"I think it will be a gradual increase in supply out of the US rather than an absolute flood. It's a pretty political issue there," said Ben Wilson, an analyst with JP Morgan in Sydney.

"I just can't see the magnitude of price discrepancy persisting indefinitely."

(Reporting by Rebekah Kebede; Additional reporting by Wakako Sato and Risa Maeda in Tokyo; Editing by Ed Davies and Clarence Fernandez)