"Browse is big. It is costly and has higher CO2 reservoir content than our other projects. Of all of our LNG portfolio, Browse would be the project most adversely affected by an unfavourable emissions trading scheme programme," Voelte told analysts and reports at a results briefing on Wednesday.

"If we don't get any certainty on that (emissions scheme), it will really impact the ability of this project to move forward," he said, adding that the cost of LNG supply and delivery schedules for other projects could also be affected.

Woodside, which operates Australia's North West shelf LNG project and has at least three other planned LNG projects in the pipeline, also said Australia's labour shortages, soaring construction costs and fiscal risks, including the government's sudden decision in May to impose a condensate tax, also posed serious threats to its business.

Woodside shares ended down 3.4 percent on Wednesday, underperforming the wider market which closed little changed.

Australia, one of the world's biggest per-capita polluters, plans to introduce an emissions trading system which will start on July 1, 2010. Energy firms reckon LNG helps reduce global emissions because gas-fired power plants emit about 70 percent less carbon emissions than their coal-fired counterparts.

Though the government has said it would compensate some emissions-intensive industries, such as coal-fired power plants, for the extra costs, LNG producers have so far been excluded from the compensation scheme.

On Wednesday, Prime Minister Kevin Rudd responded to industry grouses over the government's carbon trading plans, saying it would be open to negotiations with big business. But he also said that carbon trading could not be done without some cost to industry.

Business groups representing Australia's biggest companies and resource exporters have complained that the emissions trade system will erode corporate profits and force some companies to close operations or move offshore.

Woodside owns about 50 percent of the Browse LNG project, which has a planned capacity of 15 million tonnes a year and is estimated by analysts to cost around A$20 billion. BHP Billiton, BP, Chevron and Shell have varying interests.

Woodside said a site would be selected for the Browse LNG plant by year-end. Development options include piping gas from the Browse field to the Kimberly region in Western Australia or building a longer pipeline to Woodside's existing LNG facilities at Karratha, north of western Australia.

Voelte, who has been lobbying the government on the behalf of the LNG industry to review its emissions proposal, also said the firm's Pluto LNG project would be the least affected by the carbon scheme because of the gas' low carbon dioxide content.

Woodside said design work was under way on a second processing unit for Pluto and it was in discussion with gas owners of neighbouring fields to supply additional gas for the expansion.

For Woodside's first-half results, please click on (Editing by Ben Tan)