The company is no longer planning to build an LNG plant on the remote Maret Islands off the far north WA coast. The processes in WA have simply dragged on too long.

Inpex said in a statement to PNN that it is considering piping the gas to Darwin but the only further comment it would give was that an announcement is expected late this year.

However, two sources have said that Inpex is set on liquefaction in Darwin, and it believes the Northern Territory's friendlier business environment, gas-ready location, significant infrastructure, lack of a domestic gas reservations policy and greater proximity to Asian markets will help offset the costs of an 850km pipe to Darwin.

The NT is also taking the matter seriously, with Chief Minister Paul Henderson visiting Japan and France recently to lobby the Ichthys joint venture's management. It is believed that Inpex's partner Total is now also favouring Darwin.

Inpex lodged environmental referrals for the Darwin project with the NT and federal Departments of the Environment earlier this year and, according to one of PNN's sources, survey work on the pipeline will begin shortly.

Inpex's disenchantment with WA is easy to understand.

The company had long said it wanted to build a two-train LNG plant on the Maret Islands with first cargoes targeted for 2012. Or at least, the original target had been 2012 but delays in regulatory approvals have seen that slip to 2013 and 2014.

Inpex is believed to attribute the delays to Western Australia's convoluted approvals processes, including environmental approvals that it believes are unduly restrictive.

A joint Federal-State Government announcement early this year to conduct a two to three-year review of development in the Kimberley, putting gas projects on hold, is believed to have been the last straw for Inpex.

The governments said they were intending to facilitate the development of a common-user Browse Basin gas hub.

This had been foreshadowed in July last year, when WA Deputy Premier Eric Ripper set up a taskforce charged with identifying "possible locations for one gas processing complex, which would be used to process Browse Basin gas".

The goal was to minimise the impact of development on the natural and cultural environment by concentrating that development in a single hub.

Ripper said this hub would house several LNG production trains under different owners, and ideally all Browse LNG projects would use this hub.

However, he also said it was likely that at least two LNG hubs would be built in the Browse and one of these would be the Ichthys development, a tacit admission that Inpex's plans were so advanced that it would be unfair to force a change on the company.

But the joint state-federal LNG hub announcement in February took a different stance and Ripper no longer says two hubs are a part of their strategy.

Companies wanting to use the new hub would have to deal with environmental approvals for their LNG trains and upstream operations, but would not have to deal with any such approvals for other infrastructure associated with the hub as this would already be in place.

LNG proponents wishing to build elsewhere would be free to put in applications. But it's a fair bet that acquiring such approvals will become much harder as ventures trying to avoid using the Government-backed hub would need very strong reasons to be exempted from environmental impact legislation.

The initiative won some praise, especially from the environment movement. On the face of it, a hub could achieve several important goals simultaneously, protecting the environment and Aboriginal cultural heritage, while also cutting some infrastructure costs and development timeframes.

But there is a catch. The taskforce has begun assessing possible sites and is supposed to have a shortlist ready by the middle of this year and a preferred site selected by the end of the year.

Even assuming the taskforce meets this timetable, this will be only the beginning of the development process. Environmental assessments will follow, and so will native title discussions.

With the Government saying it wanted all West Kimberley Aboriginal groups involved in the project, the stage seems set for protracted negotiations that will further delay development, perhaps even by several years.

"Can you imagine how long all of this will take?" an LNG consultant said to PNN at this year's APPEA Conference.

"If the Howard Government had started this [site assessment process] five years ago, the LNG park might have been ready in time for 2012 or 2014, but there's no chance it can be ready in any timeframe that would suit Inpex."

Inpex, which had already been through several years of drawn-out negotiations with traditional landowners, was clearly unhappy from the start with the hub plans.

"Inpex was not consulted prior to the media release, nor was it formally advised of the Commonwealth and State Government's position at this time," the company said in a terse statement in February.

Before the month was out, Inpex signed a "project facilitation agreement" with the Northern Territory Government under which the JV will take "a serious look" at the Middle Arm peninsula near Darwin as the site for the LNG plant, Inpex Browse managing director Jiro Okada said in a statement.

"The Northern Territory Government has clearly demonstrated that Darwin offers an alternative site that could be developed within a reliable time frame," Okada said. "The joint venture must explore all realistic options."

The Northern Territory Government said the project facilitation agreement ensures that a whole-of-government approach is taken to the development of the project, including facilitating the necessary environmental and planning approvals, provision of land at Middle Arm, and port access.

Time running out to Browse LNG options - see the August issue of Petroleum magazine, out in mid-July in time for SEAAOC