Some of Australia’s biggest manufacturers fear a planned $70 billion takeover of BG Group by Royal Dutch Shell could potentially worsen what they see as a lack of competition in the country’s eastern gas market.

Manufacturing Australia, a lobby group whose members include world no 2 explosives maker Incitec Pivot and steel maker Bluescope Steel, warned that gas users seeking long term contracts were facing higher costs due to a limited number of suppliers.

The group has yet to decide whether to make a submission to a review of Shell’s bid that will be carried out by Australia’s competition watchdog.

"It’s an issue that does raise some concern," Manufacturing Australia executive director Ben Eade told Reuters. "It’s certainly not going to increase competition in a market where we think what we need is more suppliers than less." Concerns about soaring gas prices in eastern Australia have come to a head with the start of exports from three liquefied natural gas plants (LNG) plants in Queensland, including BG’s Queensland Curtis plant which opened late last year.

A report last year by Deloitte Access Economics found that manufacturing output could shrink by as much as A$120 billion ($91 billion) by 2021 due to rising gas prices as LNG exports ramped up.