In a statement to the stock exchange yesterday, the company said payment of the final balance of $22.5million for the land it was buying from Incitec Pivot would be made late next month. An option for Eastern Star to opt out of the sale lapsed on Friday.

Under the proposal, worth up to $2.5billion if fully developed and including a pipeline to the site, coal seam gas from Narrabri would be exported through an electric motor-driven mid-scale plant.

The company is collaborating with Japan’s Hitachi and Toyo on the project and hopes to begin work at the end of the year, with the first export of liquefied natural gas (LNG) as early as 2015.

Managing director David Casey said the completion of the sale reflected the company’s confidence in the LNG Newcastle project with a number of important milestones now realised.

He said a feasibility study of the Kooragang site was finished late last year with favourable outcomes.

Engineering and design work would begin within the next few weeks and a preliminary environmental assessment would be lodged soon.

‘‘Forecast project costs are well and truly competitive with industry best practice, while the size and operational flexibility of the project are ideally suited for supply from an upstream coal seam gas project,’’ Mr Casey said.

Chief commercial officer Roland Sleeman said discussions with Hunter Water, EnergyAustralia and the Newcastle Port Corporation had encouraged the company.

The port corporation had previously raised safety concerns about putting a gas project near potentially explosive fertiliser plants at the port.

A port corporation spokesman said ‘‘very preliminary’’ discussions about the site and a potential terminal berth were ongoing.