Linc Energy will shut its underground coal gasification research and development facility in south-west Queensland and move overseas.
The shutdown of the facility at Chinchilla will cost several million dollars and put the future of 30 workers at risk.
Linc chief executive Peter Bond said the company expected to begin relocating by the end of 2013 to either Poland, Indonesia or Wyoming in the US, due to a frustratingly slow local approvals process.
"The Queensland government has to take control of the regulator and make sure the policy is being followed rather than the regulator running to the beat of their own drum," Mr Bond told AAP.
"There's a disconnect between the ministerial level and the mid-tier departments."
The underground coal gasification (UCG) process converts coal into gas through combustion in the coal seam.
Mr Bond said Linc would aim to retain all of the 30 affected staff and offer positions at the company's Australian or overseas facilities.
"We're trying to limit redundancies," he said.
"Ideally we'd like to have none."
Linc said the decision came after a continuous two year operation at its UCG Gasifier 5 (G5) at Chinchilla facility.
The completion of G5 operations marked the end of almost 14 years of operational trials and technology, research and development, he said.
If the Queensland government approved the company's current G6 expansion it could potentially extend operations at Chinchilla for another two or three years, Mr Bond said.
However, he is not hopeful of a resolution after three years of waiting.
"With the demand we're getting from locations like Asia it makes no sense to continue trying to keep the government happy when we've got other governments that are happy to work with us," he said.
Shares in the company dropped half a cent to $1.355.
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