From:AAP May 04, 2012 6:40PM - THE federal government is in discussions with East Timor about carbon price liabilities for gas companies which operate in the Timor Sea.
East Timor has raised concerns it could lose millions of dollars from revenues from the offshore natural gas fields it shares with Australia.
Facilities that emit more than 25,000 tonnes of carbon dioxide a year will be liable to pay the carbon tax.
Climate Change Minister Greg Combet said the issues were being worked through at a government-to-government level.
Mr Combet was not involved in the talks but said they were underway.
But he said there was plenty of time to resolve the question.
"The regulator won't be selling the permits ... until about April next year, even though the mechanism starts on the first of July," he told reporters in Canberra.
"Companies won't be acquitting those permits for the first time until around June 2013."
Mr Combet said it was likely entities involved in the liquefied natural gas (LNG) industry would be liable for the carbon tax but ultimately the regulator would determine that.