Nov. 6 (Bloomberg) -- Natural gas production in developing Asian nations will be constrained by an inability for smaller petroleum companies to secure financing for projects, a senior director at Cambridge Energy Research Associates said.

Capital costs for petroleum projects have doubled over the last three to four years, causing some companies ``to think hard about the projects they are doing,'' Singapore-based Mark Hutchinson said today at a conference in Sydney. Deferrals of gas projects will benefit coal producers because of fuel demand from power producers, he said.

The collapse of the U.S. subprime mortgage market last year has led to a shortage in the availability of credit, which is limiting funding for expansion projects. Corporate borrowing costs have increased as prices for oil and gas declined, cutting estimated returns from new petroleum projects.

``All these things are just conspiring to delay and push out all of these different projects,'' Hutchinson said. ``What this means is that the gas is not going to come to market at the time it was originally planned. You're going to see tightness coming into the market in two, three, four, five years.''

To contact the reporter on this story: Angela Macdonald-Smith in Sydney at amacdonaldsm@bloomberg.net

Last Updated: November 5, 2008 22:36 EST