With the peninsula already dogged by delays and project withdrawals local industry fears that any further disputes could see the Canadian fertiliser giant Agrium take its development to any one of a number of other countries bidding for its attention.

The current dispute extends back to the split between the original consortium behind the Dampier nitrogen development, with both camps now laying claim to the project.

State Development Minister Clive Brown had originally expected to make a decision on the dispute in December, allocating the piece of State Government land on the Burrup already earmarked to develop the world-class ammonia-urea project to either side. However, a decision is still pending.

The stalled Dampier nitrogen project, and delays with other projects such as the GTL Resources $700 million Liquigaz methanol project, now threaten to derail the much-lauded downstream processing boom on the peninsula.

Only one project, the $650 million Indian-backed Burrup Fertilisers, is under construction and on track for completion in July 2005.

Several hundred million dollars has been spent in developing suitable infrastructure on the peninsula, which has been promoted as a prime location for petrochemical processing projects due to its proximity to Australia's largest gas fields.

But the projects have faced delays in the approvals process, land access issues, debate between State and Federal governments over infrastructure funding, tax treatment for major projects, cost of construction labour and most recently the appreciating Australian dollar.