This helps explain why Woodside and the North West Shelf partners were so relaxed. about losing a slice of the $20bn Korea Gas Corp contract to cut-price competitors.

Woodside chief executive Don Voelte said late last week that the North West Shelf venture would still proceed with train 5 of the project and would rely on finding customers later. Voelte is visiting China this week for discussions with potential buyers.

In the meantime, India needs to import gas to run power plants to keep up with demands from its rapidly expanding economy and GAIL sees Australia as a potential source for meeting “a large part of [India’s] natural gas requirements”, Ray told Bloomberg.

GAIL has said it is seeking five million tonnes of natural gas annually starting 2008, but Ray has declined to comment on the price or the possible duration of any contracts.

Ray will be in Western Australia this week to attend the AOG oil and gas conference. He said he may hold further talks with Woodside officials while in Perth.