News reports today said that a new route had been proposed by the project’s chief architect, Australian Gas Light, which trims about 400km from Oil Search’s previous design.

Oil Search managing director Peter Botten said the new plan, which comes after a week of discussions with Exxon Mobil and several potential partners, could keep the project alive.

“We are costing it out and working on a plan,” Dow Jones Newswiresquoted Botten as telling reporters at a Merrill Lynch investment conference in New York.

“I am actually reasonably optimistic in this as a way forward,” he said.

AGL’s new proposal would bring the PNG gas produced by Oil Search to Moomba, a distribution hub in central Australia, through a connection with existing lines between Mt Isa and Moomba, Reuters reported.

AGL chief executive Paul Anthony said companies involved in the project would be considering the design over the next few weeks.

“It’s a significant change to the original plan, so they are going to take some time,” Dow Jones quoted him saying.

Botten declined to comment on the cost estimates of the shorter line compared with the estimated $4.7 billion cost for the original development.

The previous plan ran into strife last month when AGL said it might pull out due to a lack of customers amid rising costs.

Indications are that if the new plan does not go ahead, the whole project could be scrapped.

“If we can get together in the short term, that’s great, but if we can’t, let’s go do something else,” Botten said.

“We aren’t going to ditch it but we are reasonably impatient along with our shareholders to know which way it goes.”

AGL is responsible for designing and building the Australian leg of the pipeline with Malaysian joint venture partner Petronas and has committed to buying about 40% of the gas.