The Australian Petroleum Production and Exploration Association supported the IEA's 2014 World Outlook released this week, which found that over the period to 2014, "demand for natural gas grows by more than half, the fastest rate among the fossil fuels, and increasingly flexible global trade in LNG offers some protection against the risk of supply disruptions".

While Australia has seven LNG plants under construction with a combined capital cost of more than $200 billion, APPEA warned that the country's gas industry was "coming to a crossroad".

"Labour market strains, increased production costs and increasing competition from North America and east Africa could stymie our potential for future growth," APPEA said.

"Australia can continue to make a meaningful global contribution to reducing emissions and enhancing economic prosperity, but only if the LNG sector's full potential is harnessed via regulatory and labour market reform.

"The US has already recorded some of its lowest carbon emissions in 20 years courtesy of the shale gas revolution that has increased use of natural gas for power generation while driving a manufacturing recovery in the wake of the global financial crisis."

APPEA added that China, a key market for Australia's gas exports, was also moving away from coal-fired electricity generation in favour of natural gas in some of the world's biggest cities, including Beijing and Shanghai.

For every tonne of carbon dioxide equivalent emitted in LNG production within Australia, up to 9.5t of emissions from coal-fired generation can be avoided.

In 2012-13, Australia shipped 23.9 million tonnes of LNG cargoes, earning $13.7 billion in export revenue. Australia's LNG exports are expected to quadruple over the next five years.