UPDATE 1-Australia state helps Woodside in land dispute

* Woodside says on course for investment decision mid 2012

* Woodside will have to continue land negotiation (Updates with detail, quote, analyst)

SYDNEY, Sept 2 (Reuters) - The Western Australia state government moved on Thursday to forcibly acquire land needed by Woodside Petroleum's (WPL.AX: Quote) Browse LNG project as a land dispute with indigenous communities threatened to delay it.

The state's intervention will allow Woodside to conclude a negotiated deal for the land and stay on course to complete its A$1.25 billion ($1.13 billion) work programme before a final investment decision can be made around mid-2012, Woodside said.

"Developing gas from the Browse Basin is critical for the development of this state, this nation and its indigenous people," Western Australia Premier Colin Barnett said.

"Economic independence and real opportunity is the best way towards self-determination for Aboriginal people and goes a long way towards reconciliation," Barnett added in a statement.

Analysts said the government's intervention clearly moved the project forward.

"The WA premier said he was going to take action if the decisions weren't made. They are trying to move forward with the project, this is one of the steps in the process," UBS Equities analyst Gordon Ramsay said.

Woodside owns 50 percent of Browse, which is estimated to hold about 13.3 trillion cubic feet of gas and 360 million barrels of condensate. Joint venture partners also include BP (BP.L: Quote), Chevron (CVX.N: Quote), Royal Dutch Shell (RDSa.L: Quote) and BHP Billiton (BLT.L: Quote)(BHP.AX: Quote).