Projects such as the expansion of the North West Shelf, development of the Greater Sunrise gas fields and the PNG to Queensland gas pipeline all face hurdles that will delay or even force projects to be delayed indefinitely.

Industry watchers put the delays down to a surprise mood-swing among potential, large-scale customers in Queensland, the Northern Territory and Western Australia.

Western Australia is currently awaiting a major decision from China over a 3 million tonnes-a-year liquefied natural gas contract while potential domestic customers such as Syntroleum and Chevron Sasol are slowing the development pace.

As for the Northern Territory, a NT Government mission to drum up domestic demand for gas from the Greater Sunrise fields has so far failed to secure enough demand to convince Shell Australia and Woodside Petroleum to switch from their preferred offshore floating LNG development option.

A Shell and Woodside review of onshore gas demand situation will not be completed until October. However, few market observers expect it to be enough to change their minds.

In a further blow to NT hopes of hosting an onshore gas processing facility, French aluminium smelter group, Pechiney - which would have been a large consumer of NT gas - has just signed a power deal with South African firm Eskom to feed a new smelter planned for the Eastern Cape region in that country.

Darwin now ranks third after South African and Western Australia in the race to host the proposed aluminium smelter.

In Queensland, the PNG gas pipeline project has hit a major hurdle with the State Government recently awarding a key gas contract to a competing supplier using locally supplied coalbed methane gas.

This week, partners in the pipeline project will meet to review whether there is sufficient government support for the $6.8 billion project to go ahead. While it has been described as "just a meeting" between ExxonMobil, Oil Search and Chevron, many in the market believe the review is likely to determine that, without Queensland and Federal Government support, the controversial plan cannot go-ahead in its present form.

At the moment, the project has only one major customers, Australian Gas Light Company, who said it will take 50 petajoules of gas if the project goes ahead. However, without confirmed customers aggregating more than 100 terajoules, its is unlikely the PNG project will not proceed.

The proposed meeting takes place against a backdrop of increasing competition from Timor Sea and coalbed methane suppliers for potential customers in Queensland, NSW and South Australia.