Turmoil in Europe has driven the world's biggest LNG producer Qatar to switch its exports to Asia, posing a threat to Australian projects, according to Woodside Petroleum boss Peter Coleman.

As he battles to keep the $40 billion Browse project on track, Mr Coleman used a business function in Perth yesterday to warn of the risks posed to the wave of LNG projects in development around the nation, including from the Federal Government's carbon tax.

He was joined by Wesfarmers managing director Richard Goyder and Fortescue Metals Group chief executive Nev Power, who said there were likely to be severe unintended consequences to the local economy from the tax, which starts on July 1.

However, it was the financial headwinds in Europe which Mr Coleman said were causing him sleepless nights, given slow growth on the continent had altered the LNG landscape.

So supply that was meant to go to Europe . . . has been redirected into Asian markets, so we are competing head to head in Asian markets now with the largest of the suppliers in the world in the Qataris, he said. And that wasn't on plans before.

Woodside this week said its long-term outlook for the LNG market remained positive and should grow by an average annual rate of 4 per cent between now and 2025.

The Woodside chief said he was already being approached by suppliers trying to pass on costs of the carbon tax, which would hit profits an Australia's competiveness.

I have fixed contracts that are set at global market rates, he said. All you are doing to me is getting into (our) margin, I can't pass on those costs.

Trade-exposed industries will be given transitional assistance under the tax.

Mr Goyder said while he believed action was needed on global warming, setting a price of $23 a tonne on carbon when international prices were less than half that was nonsense.

Coles would be vigilant in ensuring suppliers did not pass on unjustified costs from the carbon tax and was taking steps to reduce its emissions, he said.

Mr Power said the tax would clog development and defer investment.

The three men were upbeat on China's economic outlook, but said Canberra should provide more policy certainty and consultation.

Copyright 2012 West Australian NewsPapers Limited. All Rights Reserved.

(Originally published June 2, 2012, in The West Australian.)