"They are keen at the right price," she said. "They want greater competition. They say the arguments being pushed nationally that we've got plenty of gas don't stand up. There is gas but without competition, the price will increase."

The Minister also sent a delegation to the southern states to identify and encourage new customers. That marketing effort is running currently with an intensive review - said to cost around $80 million - by Woodside, Shell and Phillips Petroleum of possible domestic gas contracts from the Sunrise reservoirs.

Ms Martin acknowledged that any attempt to bring gas onshore would require substantial assistance from the Federal Government and drew parallels with the role of the WA Government in the development of the North West Shelf.

"Any project in the Timor Sea will probably need government support whether it is tax relief or direct investment through Invest Australia," she said.

One potential customer for Sunrise gas could be zinc producer MIM, which believes it can unlock $22 billion in value for the company if it can secure a cheap source of electricity to help it convert zinc concentrates into zinc metal.

Peter Lynch, an MIM general manager, told delegates at the South East Asia Offshore Conference in Darwin that Australia must bring Timor Seas gas onshore to allow world competitive energy prices.

"Bringing natural gas onshore from the Timor Sea could result in a new zinc metal industry for northern Australia," Mr Lynch said.

Staying in Darwin, the newly appointed managing director of Australian Pipeline Trust, Jim McDonald - the country's biggest pipeline operator - told delegates at the SEAAOC conference that deregulation of the gas industry has not delivered seriously competitive wellhead pricing and there is now every indication the price of gas will continue to rise.

He added government direction was necessary to ensure Australians benefited from the nation's abundant natural gas resource.

"A national strategy promoting natural gas usage, encouraging market and industry innovation, and resulting in the construction of a transnational pipeline grid and the development of a robust market for gas, would be a great legacy for any government.