This leaves Phillips Petroleum, which has a 30% stake, as the only partner needing to be convinced to embrace the proposal. Woodside has already agreed to join Shell in the deal and is close to signing a deal settling the final commercial terms.
Shell's plan is deliver gas from Sunrise to a new LNG receiving terminal to be built on the west coast of Mexico with the final product to be sold to the massive US market.
The Osaka Gas agreement will come as a blow to the Northern Territory Chief Minister, Ms Clare Martin, who is battling hard to convince the Sunrise partners to develop gas reserves through an onshore plant based in Darwin.
She has asked the Federal Government to offer $200 million worth of incentives to the Royal Dutch/Shell group. She remained sceptical of statements by Shell and Woodside it would cost another $2 billion to develop Sunrise gas onshore.
The head of Shell Australia, Dr Allen Parsley, said his company has no plans at this stage to make another bid for Woodside. Many in the market believe that relations between the companies have improved markedly since Woodside's acceptance of Shell's radical proposal to develop Sunrise gas. Dr Parsley said the two were "possibly seeking new areas for further co-operation."
