There will be a meeting on the 20th November in Perth at which the formal winding down of the controversial project is expected to be announced. The meeting has been scheduled to choose the basis of design but will probably pull the curtains down on the project.

Between 60 and 70 personnel are currently based in the Perth office. A major wave of similar retrenchments was announced at this time last year.

A Perth staff briefing was told last night that even with Shell's much touted cost reductions due to the floating LNG concept, the project's sponsors could not economically produce LNG to meet current market prices.

The partners are Shell, Woodside, Phillips and Osaka Gas.

It is understood project chief Mike Shearman was advised on Monday of the decision to mothball the project. A meeting in Singapore was called between the project's sponsors, at which the decision to shelve the controversial floating design (or its traditional fixed platform alternative) was taken.

The Wednesday staff briefing was also told that there was no domestic gas market for Timor Sea gas in Northern Australia, despite recent renewed marketing efforts which were chiefly designed to appease the strident calls of the NT Government to bring Timor Sea gas onshore.

The apparent closure of the product should see a rise in the fortunes of PNG focused Oil Search who is wedded to developing the PNG-QLD gas pipeline. This project is the major competitor for Timor Sea gas and the Queensland energy market has been the battleground for the gas marketers of the two projects.

A Woodside spokesman has denied the rumour, saying that at all times the end of November or early December was the chosen time at which the basis of design would be chosen for Sunrise.

"The operating committee will be deciding in the forthcoming weeks the basis of design and technical budgets," he said.

"The issues surrounding the project for domestic gas and volumes have not gone away. We will not be entering the basis of design until the market and design issues are solved.

"A decision has categorically not been made," the spokesman emphasised.

The reality is that while the operating committee might not have made up its mind, it takes its lead from the sponsors, who it seems have made up theirs.