If the project goes ahead, Australian LNG would be shipped to a floating terminal to be built 23km offshore from Los Angeles, then piped to shore.

The US is looking to diversify its energy sources, and at a private lunch Howard sought to assure US vice-president Dick Cheney of Australia's "record and capacity as a supplier", a government source told the Sydney Morning Herald.

Californian governor Arnold Schwarzenegger has said California may give its verdict on Cabrillo Port before the end of this month.

While the siting of the terminal is ostensibly a state decision, a recent vote in the US Senate has given federal regulators the final authority over deciding where to build LNG terminals, despite opposition from state governors, including Schwarzenegger.