Australia has the seventh largest shale gas reserves in the world but a lack of roads and pipelines could hinder the industry’s development.

An HSBC report shows that in addition to a lack of infrastructure, such as ports, roads, pipes and processing plants in some remote areas, high extraction costs would also likely slow the pace of development.

The report says US Energy Information Administration (EIA) estimates show that Australia has the seventh-highest technically recoverable shale gas reserves in the world but exploration and development remain in their infancy.

It says smaller independent companies have made initial assessments of high potential shale basins in Australia and major international companies were now beginning to invest in the projects.

But HSBC says while the Cooper Basin benefits from existing infrastructure, other key shale gas areas are remote and lack established infrastructure.