The contract will involve supplying Guangdong province with 3 million tonnes of natural gas a year, which would be worth about $750 million annually to NWS partners.

Currently the NWS project's main customers are Japanese utilities however success in China could pave the way for future contracts in South Korea and Taiwan, according to industry observers.

With Australia and China about to celebrate 30 years of diplomatic relations, the Federal Government is looking to the contract to help cement political and economic relations between Australia and the 'Middle Kingdom' of one billion plus people.

Australian is competing against the BP-backed Tangguh project in Indonesia and the ExxonMobil-backed Qatar bid. While price remains foremost in the minds of Chinese negotiators, they have made it clear that political considerations will figure in the final decision.

It is understood that in return for the awarding of the contract, Australia will offer China a share in the North West Shelf consortium, however, industry officials have warned that any share less than one-third of the contract, would be "less than optimal" for Australia.