Victorian Deputy Premier Peter Ryan is calling for companies to come up with alternative ways to deliver gas to regional communities.
The State Government has invited companies to submit plans on ways to connect compressed natural gas (CNG) or liquefied natural gas (LNG) technologies to towns.
It has offered a $22 million 'bounty' for a company interested in rolling out piped natural gas to Lakes Entrance and Orbost in the state's south-east.
However, the company named as best placed to deliver the natural gas, Evenstra, says the money will not be enough to run an extension from the main eastern gas pipeline to the towns.
Mr Ryan says the new offer shows the Government is determined to connect Victorian towns to natural gas.
"One occurs on the basis of the existing grid system, that most Victorians are used to, and that is the bounty option which most Victorians are used to in the marketplace, whereas the CNG and the LNG options they do involve different forms of technology but nevertheless the opportunity is there for those who want to be a part of the action," he said.
He says the Government will discuss funding with gas companies.
"We will take one step at a time," he said.
"We will see the figures that apply as at the closure ...
on the 30th of November, we'll assess any bids that are made and we'll respond to them appropriately and at that point in time."