Australia's navy told to be more visible near resource projects

The Australian naval frigate HMAS Ballarat is pictured in this handout photograph taken on March 10, 2007.

CANBERRA (Reuters) - Defense planners urged Australia's military on Monday to maintain a stronger presence in the country's north and northwest to guard the booming resource industry and be better placed to respond to challenges from Asia and the Indian Ocean.

An interim report of Australia's defense posture review said

a more visible military presence could counter perceptions that offshore oil and gas projects could be easy targets.

The recommendation could see more navy exercises and new amphibious assault ships off the northwest coast, home to the iron ore industry and around A$200 billion ($212 billion) worth of liquefied natural gas projects, and a stronger navy presence around the coal and gas-rich Queensland state.

"The review makes the point that there is a perception in the north and north west of Australia of a lack of visibility, which undermines the notion of the defend Australia policy," Defence Minister Stephen Smith told reporters.

Smith set up the posture review last June and will receive its final report in March. Final decisions will be made with a wider review of the nation's defense strategy to 2030.

The United States, Australia's top strategic ally, also plans to increase its Asia Pacific presence and U.S. President Barack Obama has announced plans to position 2,500 marines in a de facto base in northern Australia.

China is also expanding its military and modernizing its navy, moves that have alarmed other countries in the region, especially Taiwan and Japan, while India is building a blue-water navy to extend its strategic reach.

The Philippines is considering a U.S. proposal to deploy surveillance aircraft temporarily to enhance its ability to guard disputed areas in the South China Sea.

The posture review said that sea remained a potential flashpoint, while the risk of a major conflict on the Korean peninsula posed significant regional security challenges.

"Securing sea lines of communication and energy supplies will be a strategic driver for both competition and cooperation in the Indian Ocean region to 2030, and Australia's defense posture will need to place greater emphasis on the Indian Ocean," the review said.

TERRORIST ATTACKS

But it said the likelihood of a direct military attack on Australia remained remote and Australia's resource and energy assets were unlikely to face threats from specific states.

"The potential for terrorist attacks against oil, gas and other resource industry infrastructure in the North West is also an important consideration, but the level of vulnerability to such attacks can be exaggerated," it said.

Offshore oil and gas projects, it said, would not be easy to access.

The resource state of Western Australia has a major navy base near the capital Perth, and is home to the elite Special Air Service forces, but there are no major military bases in the state's north, facing Asia.

The review said industry had expressed concern that the current presence in northern Western Australia was not in line with the importance of the resource sector to the economy.

The region includes the Gorgon oil and gas fields, operated by Chevron, Woodside's northwest shelf oil and gas fields, the Browse basin targeted by Royal Dutch Shell and Woodside's Sunrise oil and gas fields.

The review said Pilbara region alone provided 29 percent of merchandise exports and 60 percent of exports to China.

It said Australia should consider more navy exercises in the region, including the use of army landing forces, and more simulated war games. The navy should also seek more access to commercial ports at Exmouth, Dampier, Port Hedland and Broome.

In Queensland, the report said Australia should consider basing more large ships and submarines in Brisbane to ease pressures on the main eastern fleet base in Sydney.

Australia is considering building up to 12 new long-range submarines and has committed $7.6 billion for three powerful air warfare destroyers, due in service from 2015.

Australia is also aiming to buy 100 Lockheed Martin F-35 Joint Strike Fighters, to complement the fleet of F/A-18 Hornets and Super Hornets, based in Queensland, New South Wales and the remote Northern Territory.

($1 = 0.9409 Australian dollars)

(Editing by Ron Popeski)