According to analysts and media commentators, with the PNG project capable of supplying low cost gas to the east coast market for 50-years plus, Santos and Origin Energy face the grim prospect of falling gas prices and sales volumes for their Cooper Basin product.

"If retailers do not commit to support the project [PNG pipeline] it is likely that price increases will be in the order of between 10% and 15% over the next five to 10 years," said the Australian Financial Review.

"For Santos, the Cooper Basin makes up the lions share of its assets, and half of Origin's upstream production and nearly one-quarter of its earnings before interest and tax. Clearly they are either big winners or losers."

JP Morgan analyst David Leitch said Origin's argument that its competitive advantage in being close to market is correct but is "irrelevant". "What consumers care about is the cheapest gas at the city gate," he said.

"In NSW, South Australia and Queensland, it seems clear to us that the lowest quotes on offer for gas post-2006 are from PNG."

Many in the market also believe a go-ahead for the PNG pipeline will almost certainly see a Santos bid for Oil Search, which would give it a 52.5% in the project. The PNG government has a 18% stake in Oil Search while energy giant Woodside has 7%. Both of the later parties are understood to be sellers.