The proposal would see the Pluto and North-West Shelf plants – which together form the Burrup Hub – used to handle gas from undeveloped fields in the region.

It comes after Woodside ditched plans to use so-called floating LNG plants, to process gas for export at the giant Browse gasfield.

As a first step, Woodside is considering raising throughput at its Pluto processing plant from the present 4.9 million tonnes a year level, either by de-bottlenecking, which could add an estimated 1 million tonnes a year to the volumes it handles, or by installing an off the shelf 1-1.5 million tonnes a year plant.

"We're focusing on a 'Burrup Hub' that will maximise value from the existing investment," chief executive Peter Coleman said, pointing out that Woodside has equity in the two onshore processing plants as well as in both of the largest undeveloped offshore gasfields, referring to the Scarborough and Browse gasfields.

A final decision will be made in the September quarter, the company said. Woodside is also angling to get a share of the transport fuel market in the north of Western Australia, hoping that gas could displace diesel oil throughout the mining sector.

The disclosure came as the company lifted its 2016 net profit to $US868 million ($1.1 billion), which was up sharply on the performance in 2015 and broadly in line with analyst forecasts, paving the way for a hike in the final dividend to 49¢ a share from 43¢ paid a year ago.

​The 2015 net profit was just $US26 million, due to the low oil price at that time which bit heavily into revenues and prompted a series of asset write-downs. Putting the write-offs to one side, the net profit was $US1.1 billion.

In 2016, output rose 3 per cent to 94.9 million barrels of oil equivalent, with production of liquefied natural gas running at 63.7 million barrels of oil equivalent, up 9 per cent on the previous record of 2014. For 2017, liquefied natural gas output is expected to rise to an estimated 63-66 million barrels of oil equivalent.

In the year ahead production will benefit from the start-up of the giant Wheatstone export gas project, with other plans such as accessing a greater portion of the output from Pluto to help underwrite a 15 per cent lift to output over the next three years.

Citi analysts said this anticipated growth was "well above market expectations and hence positive for sentiment".

"On Pluto, Woodside has flagged the potential for tie-back of successful multi-trillion cubic feet exploration targets, facilitating acceleration of Pluto reserves and possibly mid- or large-scale expansion potential, but the market is unlikely to pay for this before exploration success. Woodside is also discussing the opportunity for LNG use in marine and trucking."

Domestically, converting from diesel to gas in the mines in the north west of Western Australia could add "0.5 million tonnes a year, plus" to annual gas sales in the region, the chief executive, Mr Peter Coleman said. And, further growth could emerge from the marine sector which is under pressure in some circles to move to use cleaner forms of energy such as gas.

Even just converting the shipments of iron ore to China from Australia to utilising gas could add well over 0.5 million tonnes a year of additional gas demand, Mr Coleman told analysts.

Gas prices strengthened, especially in the latter part of the year, in part reflecting production problems with the large Gorgon project off Western Australia which forced some north Asian buyers to scramble to find alternative sources of gas as they moved into peak winter demand. Full output at Gorgon is not expected until later this year, which could keep export gas prices buoyant into 2017.