Australia's target to become the top liquefied natural gas (LNG) exporter in the world could be at risk following reports that a major LNG venture would no longer push through because the project would no longer be financially viable.

Woodside, the company behind the $40-billion James Price Point LNG project in Kimberley is expected to confirm the shelving of the major project in a filing with the Australian Securities Exchange.

However, Woodside's partner in the project, Royal Dutch Shell, could still push through with the venture by pushing for the gas field development using its floating LNG vessels to cut the spiraling construction costs.

But Western Australia Premier Colin Barnett is opposed to the use of the tankers and had supported a land-based solution to the LNG project to deliver the right mix of jobs and economic development to the state.

Mr Barnett denied on Friday that he had made a decision on the project, which would have provided 8,000 jobs to the WA economy - 6,000 onshore and 2,000 offshore.

Analysts gave the LNG venture in Kimberley coast a slim chance for approval because of the very high capital expenditure, making the economic viability of the gas project very challenging.

The premier, who said it would be a bitter disappointment if the Woodside venture would not push through, was quoted by The Australian as saying, "If they choose not to do so, then that would take the project basically back to square one and probably would mean delays of two to three, maybe five years."

Resources Minister Gary Gray gave the JV partners until June 30 to make a final investment decision on the LNG project.

As of September 2012, the Woodside LNG project is one of the eight major LNG projects in Australia waiting for a final decision. The others include Exxon Mobil and BHP Billiton's Scarborough gas field project and Hess Corporation's Equus project.

Those that have already started construction include the Gladstone LNG project in Queensland and the Gorgon LNG project in Barrow Island

If all of these ventures would push through, Australia could overtake Kuwait as the world's largest LNG exporter.

RELATED STORIES