PERTH, May 23 (Reuters) - Japan power generator JERA warned on Thursday it could consider liquefied natural gas purchases and investments in Asia, the Middle East and the United States if Australia fails to provide sufficient financial support to lower costs.

Australia now accounts for about 40% of all energy imports by Japan, which has doubled down on investments there after a fallout with key supplier Russia over the Ukraine war.

However, in March last year Australia passed a tougher greenhouse gas emissions reduction law which requires new gas projects supplying existing LNG plants to have net zero reservoir emissions, imposing new costs via methods like carbon capture and storage (CCS).

Gaku Takagi, JERA's chief executive in Australia, said on Thursday that federal budgetary support for CCS was "very small" and "disappointing," adding that it was very difficult to produce price-competitive LNG without state support for CCS.

"JERA is now investing in five Australian LNG projects, and some projects require CCS," Takagi told the Australian Energy Producers' Conference.

Japan's top power generator, which is jointly owned by Tokyo Electric Power and Chubu Electric Power, agreed in February to buy a 15.1% stake in Woodside Energy's Scarborough LNG project, as it races to secure long-term LNG supplies.

Takagi also said that JERA would be "happy to do" CCS in Australia if it provided lower cost incentives, adding if that did not happen, other countries such as Malaysia and Indonesia, could prove competitive.

He said the Australian government's lack of financial support for production of hydrogen and ammonia, and comparisons with U.S. policies such as the Inflation Reduction Act, took some of the shine off Australia as a destination for Japanese investment.

JERA, one of Japan's biggest polluters, plans to phase out inefficient coal-fired power plants by fiscal 2030 and convert all other coal-fired power generation to ammonia by the 2040s to eliminate coal completely.

"If the Australian government will not give much more financial support to hydrogen and ammonia in Australia, we need to purchase hydrogen and ammonia from other places, such as the United States and the Middle East," he said.

Last week JERA unveiled plans to invest 5 trillion yen ($32 billion) by 2035 to maintain current annual LNG procurement of more than 35 million tons, and boost annual purchases of hydrogen and ammonia to 7 million tons, from none now.

The utility also plans to use the funds to increase its renewable energy capacity to 20 gigawatts (GW), from 5 GW now.

"As an LNG buyer, between Japan and Australia, this partnership we created is very stable," Takagi said.

"But if the Australian government does not support the LNG industry in Australia, and the LNG price is higher than expected, we need to change the energy source to other countries." (Writing by Sudarshan Varadhan; Editing by Clarence Fernandez and Emelia Sithole-Matarise)