The decision in favour of Woodside's preferred location advances the project towards the engineering phase and ends an impasse that eventually dragged in the Western Australian government and federal officials, Reuters reported.

Perth-based Woodside said the next phase of the development will be a basis of design process, followed by front-end engineering and design work in 2011 to enable a final investment decision by mid-2012.

Woodside owns 50% of Browse, which is estimated to hold about 15 trillion cubic feet of gas. BP and Chevron have 16.67% each, while Shell and BHP Billiton each have 8.33%.

Frustrated by a lack of progress on the project, the federal and Western Australian state governments had imposed a deadline for the partners to select a development concept by April 2010 as a condition of retaining leases associated with the Browse field.

Woodside has always backed the James Price Point option near Broome, with the Western Australian government keen to see the project anchor the site as a “multi-user” processing hub shared by other offshore developments.

The location, in the culturally and environmentally sensitive Kimberley area, has drawn opposition, with some reportedly suggesting gas from the Browse area could be routed through Woodside’s existing LNG plant at Karratha.

Meanwhile, Woodside said separately it was in talks with at least three gas buyers that are willing to be foundation customers for the Browse LNG project.

Woodside chief executive Don Voelte said the company had not offered equity stakes to potential customers as part of the LNG sales talks and he was confident of getting a "very good price" for the Browse gas, Reuters reported.

Published: 09 February 2010 00:53 GMT  | Last updated: 09 February 2010 08:58 GMT