Oil and gas producer Santos Limited (ASX:STO) believes increasing demand could see the price of gas more than double in the next 20 years.
Appearing at the Opportunities and Challenges for Australian Gas conference, Santos said the forecast price increases will make the development of extensive additional resources economic for the first time.
Australian gas prices now sit at around $4 a gigajoule and Santos believes they could rise up to $9 a gigajoule.
At the end of last week Santos moved a step closer to securing its acquisition of Eastern Star Gas Limited (ASX:ESG) and its coal seam gas resource in New South Wales, in a deal worth in excess of $700 million.
Coal seam gas development continues to remain controversial due to concerns that the methods used to access it damage farmlands and water resources.
In the 2011 financial year Santos' net profit rose 115 per cent to $504 million.
