COMPETITION watchdog the ACCC has thrown a spanner in the works of Shell's takeover of the BG Group deferring it approval until November.  

In April Shell agreed to fork out $94 billion for BG Group, which includes the QGC coal seam gas operation.  

However ACCC chairman Rod Sims now says other LNG operators might lose out.  

"By aligning Shell's interest in Arrow Energy with BG's LNG facilities in Queensland, the proposed acquisition may change Shell's incentives (to) prioritise supply to BG's LNG facilities over competing gas users," Mr Sims said.   

"Shell could choose to direct more of Arrow's large gas reserves towards meeting BG's contracts to supply LNG export markets removing some of Arrow's gas from the domestic market."  

Mr Sims said Arrow had the largest uncommitted gas reserves in eastern Australia with few other potential suppliers to the domestic market.   

"If the proposed acquisition resulted in less supply of gas to the domestic market, therefore, this could substantially lessen competition to supply domestic gas users and lead to higher domestic prices and more restrictive contractual terms," he said.  

"The ACCC has received a large number of submissions from market participants concerned about the competition effects."  

Mr Sims said the ACCC would accept further submissions to its statement of issues by October 8 and defer its final decision until November 12.