The Federal Resources Minister and the West Australian Premier are butting heads over the federal government's push for the rapid development of Woodside Petroleum's multi-billion-dollar liquefied natural gas project.

WA Premier Colin Barnett is reportedly the biggest hindrance to the project, because he is strongly opposed to the use of floating LNG technology to process the gas reserves off the WA coast. Barnett has warned it will create fewer jobs than a land-based project.

Media reports say that Resources Minister Gary Gray and Woodside are both urging Mr Barnett to remove the existing Browse lease conditions, which stipulate that the project must be built onshore at James Price Point.

Woodside and their partners in the Browse project - Shell, BP, Mitsubishi/Mitsui and PetroChina – have requested their agreement be adjusted to allow the processing of gas on a giant floating barge facility, currently it forces the group to study onshore development. Reports say Mr Gray has undertaken to remove any conditions from the federal leases covering the Browse permits, allowing a floating facility to proceed.

The WA Premier has said Australia would be "stark raving mad" to allow FLNG. He declares it an unsafe technology and its use for Browse would be "a silly result" for Western Australia. FLNG technology involves using the components of a land-based LNG plant on an enormous ship that sits above offshore gasfields. The technology allows for the development of gasfields previously considered too remote or too small to warrant development via traditional methods.