A late September or early October timeframe for the talks has been proposed, with negotiations expected to get heated with up to $30 billion in royalties at stake.

The Timor Sea holds the Greater Sunrise and Bayu-Undan gas fields and the Laminaria, Corallina, Elang/Kakatua/Kakatua North oil fields.

The Bayu-Undan partners recently received approval from the Timor Designated Authority for its $2.24 billion liquefied natural gas export project - Australia's second LNG project after the North West Shelf.

The project will be managed out of Darwin, and is based on Bayu-Undan gas reserves (3.4 trillion cubic feet) in the Timor Sea joint development area between East Timor (90%) and Australia (10%).

Currently Australia is seeking 80% of the reserves while East Timor wants exclusive access.

East Timor, which gained independence from Indonesia in 2002, has promised to use royalties to help alleviate poverty, create jobs and improve education in the nation of 760,000.

The confusion over the boundaries comes as both countries maritime boundaries overlap 200 nautical miles from the coastline, which is consistent with entitlements under international law and the United Nations Convention on the Law of the Sea.