Australian foreign minister Alexander Downer told parliament yesterday that the latest talks, held in Darwin, had been successful.

"Officials have now initialled an agreement and exchanged letters on the basis of an agreed text," Downer said.

An official signing ceremony is expected by mid-January next year. The full detail of the deal would not be released until it was formally signed, Downer told parliament.

"Importantly this is a deal which is a good one for both Australia and East Timor," he said.

"It safeguards Australia's sovereign interests and it will provide with the certainty needed for large scale resource projects to go ahead."

Arrangements under the 2002 Timor Sea Treaty would remain in place, he said.

"That means East Timor will continue to get its 90 per cent share of the revenues from the production of the joint development area," Downer said.

"At current oil prices, revenues from that area alone could deliver around US$14.5 billion to East Timor over the next 20 years.

"I'm very pleased that East Timor has set up a petroleum fund to ensure the prudent management of its petroleum wealth."

Woodside Petroleum weclomed the announcement, but said it had yet to see the agreement and noted the agreement still had to be formally signed by both parties then ratified.

The agreement is not likely to mean that the Greater Sunrise project will be fast-tracked, as Woodside is now prioritising development of its Pluto field and a new Browse Basin LNG hub.

"The future of the Sunrise Gas Project remains dependent on several factors, including the fiscal regime under which it would operate, the cost and location of any development and the successful marketing of the resource," Woodside said.

Dili is still keen to have an LNG plant for the Greater Sunrise field sited on Timorese soil, but by the time Sunrise is developed, Darwin will be a well established LNG hub.