SYDNEY (REUTERS) - Australia and East Timor said on Tuesday (Jan 24) they aim to reach an agreement on a maritime border by the end of September, which would end a decade-old row between the two nations that has stalled a US$40 billion (S$57 billion) offshore gas project.

Australia has previously resisted renegotiating a permanent border but under pressure from the United Nations has agreed to enter talks with East Timor, which is desperate to see the Greater Sunrise field, in waters between the two countries, developed.

East Timor and Australian officials met with an independent body tasked with finding a resolution earlier this month, where a timetable was agreed and possible areas of discussion were set out, a joint statement from the two countries and the Permanent Court of Arbitration said on Tuesday.

The existing maritime boundary is aligned with Australia's continental shelf, but East Timor has long argued the border should lie half way between it and Australia - placing much of the Greater Sunrise fields under its control.

"The Commission intends to do its utmost to help the parties reach an agreement that is both equitable and achievable," the joint statement said, referring to the Conciliation Commission.

The long-running political dispute has led the owners of the Greater Sunrise fields - Woodside Petroleum, ConocoPhillips, Royal Dutch Shell and Japan's Osaka Gas - to shelve the project.

The fields are estimated to hold 144 billion cubic metres of gas and 226 million barrels of condensate, which analysts have estimated could be worth US$40 billion.

Australia earlier this month agreed to allow East Timor to terminate an oil revenue sharing treaty between the two countries, while earlier treaties that govern production remain in place.

East Timor has withdrawn legal proceedings it launched over the past few years against Australia challenging the validity of the Treaty on Certain Maritime Arrangements in the Timor Sea, to advance the conciliation process, the joint statement said.