"It is disappointing that this decision has been reached," Macfarlane said.

“But there is still strong demand for Australian LNG sales and our exports will continue to grow.”

The minister said with construction on the North West Shelf fifth train well advanced and expansion of the Darwin LNG facility expected in “the not too distant future”, Australia was still on track to bcome one of the world’s top three exporters within the next decade.

"While the proposed BHP Billiton gas plant won't go ahead, there are plenty of other market opportunities for Australian LNG in the Asia-Pacific, including alternative entry points for Australian LNG into the North American market,” he said.

One alternative entry point is Mexico, but the Mexicans have indicated that they may need all imported LNG for themselves rather than onselling some to California.

In Asia, India represents a strong emerging market while demand from other customers is growing.

"Demand from the Asia-Pacific rim is very strong as nations look to LNG as a clean energy fuel of the future as well as an important part of their energy security mix,” Macfarlane said.

"With the issue of California now resolved, Australia can focus on the overwhelming demand from other countries.”

But in fact, the issue of California is not resolved and will not be until Woodside’s proposed OceanWay LNG import scheme has been approved or rejected.

OceanWay is designed to use delivery buoys more than 32km offshore from Los Angeles International Airport with dual undersea pipelines to deliver natural gas to shore. This is very different to the 14-storey high development that BHP Billiton was aiming to build off the scenic and wealthy enclave of Malibu.

Two developments similar to OceanWay were recently approved in Massachusetts.