ConocoPhillips (COP) and Origin Energy Ltd. (ORG.AU) are auctioning a stake that could be worth over US$1 billion in an Australian gas-export project, moving to bolster funding for construction after agreeing Wednesday to double its size.

The sales process follows a string of major LNG deals involving Asian companies taking equity in Australian liquefied natural gas projects to secure long-term supplies of clean fuels as their economies grow. It also underscores confidence that Australia's close proximity to Asia makes the country competitive with rival LNG producers such as Qatar, which is redirecting cargoes eastward after a shale gas boom dampened interest in LNG in North America.

Australia is poised to overtake Qatar as the world's biggest LNG exporter by the end of the decade, with more than US$175 billion of new terminals being built by energy heavyweights including Chevron Corp. (CVX) and Royal Dutch Shell PLC (RDSB).

Origin, Conoco and China Petrochemical Corp., known as Sinopec, made a final investment decision Wednesday to increase the size of their massive development in Queensland state to two LNG production units. Australia Pacific LNG, or APLNG as the project is known, will now be capable of producing up to 9 million metric tons of LNG annually for export to China and Japan.

Conoco maintained earlier estimates that an expanded project will cost US$20 billion to build and ship its first LNG cargo in 2015. Both companies have tied up debt financing, while Sinopec has finalized a US$1.4 billion deal to boost its equity stake in the project to 25% from 15%.

Grant King, chief executive of Sydney-based Origin, said the company would like to reduce its stake to about 30% from the current 37.5%, adding he expects Conoco to sell a similar interest. The companies previously sold down stakes in the APLNG project to Sinopec in tandem.

A Perth-based spokesman for Conoco was unavailable for comment.

Origin shares jumped 4.6% by 0433 GMT as news of the stake sale doused speculation that Origin may need to issue new shares worth up to US$1 billion to bolster its funding position.

Mr. King said he was confident there would be interest in the APLNG stake, even though the development's targeted LNG output has already been contracted to buyers. Equity in LNG projects is typically tied to offtake deals.

"We do believe that there's potentially broader interest," King told reporters. He added some parties may want to invest in the project to get access to coal seam gas fields, which could be developed through construction of a third production unit at APLNG or rival LNG projects.

The positive share price response likely also reflects relief that Origin didn't announce any cost overruns after rival LNG projects under development in Queensland involving Santos Ltd. (STO.AU) and BG Group PLC (BG.LN) recently revealed 36% and 16% budget blowouts.

"It appears that Origin has to date successfully managed the upstream development," Macquarie analysts said. "Nonetheless, Origin conceded that some of the US$2.5 billion in contingencies have been absorbed."

King was careful not to promise there won't be cost overruns in future, stressing it will be three years before the project is finished.

"It would be simply wrong to suggest that we can guarantee today that we will not experience our share of those challenges," King said.

-Write to Ross Kelly at ross.kelly@wsj.com