The announcement clears a key hurdle for the project, which was refocussed toward the Burrup Peninsula after gas supplies into Darwin became uncertain.

"We are delighted to have been able to appoint the lead arrangers for the project financing. Senior lenders will provide approximately 70 per cent of the funds required for our first project and we will now focus on concluding arrangements with the industrial participants, the Australian and Western Australian Governments and others to secure the balance," chief executive of GTL, Mr Kevin Alexander said.

"Negotiations are continuing and we are working towards financial close. Once the funding is in place we hope to move quickly towards the construction phase of the project."

The proposed methanol plant will produce about one million tonnes of liquid fuel per year using natural gas to be supplied by the likes of Apache Corporation, Santos Ltd and Globex Energy Inc.

GTL Resources said it is anticipating the engineering, procurement and construction contract for the plant will be signed soon after the due diligence process is complete with first production slated for 2004.