Woodside Petroleum (ASX: WPL) sought permission for the West Australian (WA) government to postpone its decision on the proposed and controversial $30-billion Browse liquefied natural gas (LNG) project to 2013 from mid-2012.

WA Premier Colin Barnett said on Monday that the government would likely give in to Woodside's request.

Woodside stressed that the postponement of the project at James Price Point, north of Broome, is not linked to the protest by environmental groups against the project. Woodside plans to extract LNG off WA's north-west which it would pipe to a processing plant near Broome and shipped to Asian markets.

Although Indigenous landowners agreed to the project in exchange for $1.5 billion in benefits, the WA Supreme Court declared in early December that the land acquisition notices used by the state government for the planned project were not valid.

Heidi Nore of the Wilderness Society said Woodside and its investors are probably developing cold feed because of the company's lack of environmental approval for the project. She stressed that WA is the wrong place to put up Australia's largest LNG development.

However, resources industry observer Peter Strachan - the editor of Web site StockAnalysis - said the delay in Woodside's project is not so much due to the opposition of green groups, but due to shortage of workers who are experts in LNG projects.

Reports said that Woodside's joint venture partners - BHP Billiton, Shell, British Petroleum and Chevron - prefer cheaper alternatives, particularly to process the LNG at the existing North-West Shelf facility near Karratha. Goldman Sachs analysts said the alternative proposal is a realistic fallback whose attractiveness increases with the passage of time.

Woodside Chief Executive Peter Coleman said the firm is open to other options due to the worsening inflationary environment in the state which is adding pressure on the Browse business plan. He added the financial viability of the JV would be clearer in the next three months when bids start to arrive.

The company's shares closed at $30.24 on Monday.

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