Eastern Star chairman and former National Party MP John Anderson signed a memorandum of understanding in Tokyo on Friday with executives from Hitachi and another Japanese company, Toyo Engineering.

Mr Anderson said the memorandum paved the way for a feasibility study into the development of a liquefied natural gas export terminal capable of producing one million tonnes of gas a year, or about eight to 10 ships a year worth of product.

If all went well the terminal could be operating by 2014.

He said it would take about $1 billion to build the liquid gas plant and another $500 million to build the pipelines needed to bring the gas from Eastern Star's fields near Narrabri.

Plans for the terminal were first reported in The Herald in August last year.

Ports Minister Paul McLeay, who was in Newcastle yesterday, said any proposal for a gas-export facility would be assessed by Newcastle Port Corporation and the Department of Planning.

"I am interested in hearing about any plans for new opportunities for trade at the port, as long as it can be done safely and there is a solid plan behind that that meets all planning and environmental requirements," Mr McLeay said.

Eastern Star managing director David Casey said the Hitachi/Toyo electric motor-driven technology to be used at the Newcastle plant was quieter than its competitors.

A "modular design" meant cost and time savings of about 20 per cent on "other world-scale facilities".

As an industry, coal-seam gas is at its early stages in the Hunter Valley and test drilling has tended to attract environmental criticism.

Environmental groups Hunter Valley Protection Alliance and Rising Tide both raised concerns about the project yesterday, saying gas mining was known to damage underground aquifers.

In a presentation last month, Eastern Star unveiled details of horizontal drilling programs, in which drills were run along the length of fractured coal seams.