In one of the biggest developments, Eastern Star Gas has signed a memorandum of understanding with the Japanese companies Hitachi and Toyo Engineering.

The companies have joined hands for exploring the opportunities of the export of liquefied natural gas (LNG) from Newcastle in four years.

Reports suggest that a feasibility study is being conducted which asses the opportunities of exporting LNG from Newcastle. The feasibility study is using the electric motor drives.

Company reports say that it is hoping to link its coal seam gas explorations in Narrabri with an LNG plant in the Newcastle Port.

Appreciating its partners, the Eastern Star said that Hitachi and Toyo had the right kind of experience and technologies that would help in accelerating the investigations.

Confirming the news, Company Chairman John Anderson said that if the study outcomes were favorable, the design activities for the project could commence by the latter part of the year.

He further said that the first LNG export out of Newcastle could take place in 2014.

Reports confirm that the approximate costing of the Eastern Star's LNG plant would be about $1bn and the pipeline to the company's Narrabri coal seam gas project would cost an additional $500m.