Led by the highly regarded economist, Mr Peter Brain, the institute warned that Australia would miss out on $22 billion over the life of the project in economic benefits as well as 80,000 jobs if Shell's proposal comes to fruition.

The report follows statements from the Northern Territory Institute of Economic Development that onshore processing of the gas would benefit the Territory by allowing it to develop LNG production capacity greater than the North West Shelf, a methanol industry, flow-on oil and gas activity valued at more than $1 billion and a significant role as a supplier of natural gas to the Australian domestic market.

The strong arguments and the statistics are, however, likely to fall on deaf ears at Shell and Woodside. The two companies firmly believe that the floating proposal would be $2 billion cheaper than bringing Sunrise gas onshore. Unless the proposal for a floating LNG plant is adopted, there will be no project.

The NIEIR expects its report to trigger a robust debate over national interest. It argues that Australia urgently needs an energy policy that puts national interests first. This would provide a framework to change the economics of projects such as the Sunrise proposal by legislation or through infrastructure assistance, NIEIR said.