Australian energy company Woodside said Thursday it was in preliminary discussions to explore options for liquefied natural gas development in Texas.

The Australian company said affiliate Woodside Energy signed a non-binding memorandum of understanding with energy company Sempra LNG.

"[Both sides] will commence preliminary discussions and assessments pertaining to the potential development of a natural gas liquefaction facility at Port Arthur, Texas," Woodside said in a statement.

The potential project could have a total export capacity of 10 million tons of LNG per year once permitted. In March, Sempra started the filing process with the Federal Energy Regulatory Commission to export LNG sourced from U.S. reserve basins to countries that have, or will have, a free-trade deal with the United States.

A special permit is needed to export LNG sources from domestic reserves to countries that don't have a U.S. free-trade agreement. Supporters of more U.S. gas exports argue it would provide a source of economic stimulus at home and enhance economic leverage overseas. Detractors fret over the potential increase in hydraulic fracturing, the controversial drilling practice known also as fracking.

Last year, Sempra and consortium partners at Japan's Mitsubishi Corp. broke ground on the Cameron LNG facility in Hackberry, La. Slated for a 2018 launch, the project will be able to export 12 million tons of LNG, or around 1.7 billion cubic feet per day.

The groups behind the project have export deals with several Asian countries.

Woodside is Australia's largest oil and gas company, serving as the operator of the giant Pluto LNG project in the country.

"Sempra Energy and Woodside bring together an extraordinary complementary set of experience and skills from two world-class organizations," E. Scott Chrisman, vice president of commercial & development for Sempra LNG, said in a statement.