The proposal put forward by ChevronTexaco envisages a subsea Gorgon development with the gas to be piped to Barrow Island. A foundation LNG, or gas-to-liquid type customer would then utilise the bulk of the gas and underpin the development.
Further down the track, if the Gorgon partners can get domestic support, a pipeline would also be built to the WA coast, connecting to the Dampier-Bunbury natural gas pipeline.
The partners - ChevronTexaco, Royal Dutch-Shell, and ExxonMobil - said less than 5% of the 23,000 hectare island would be needed for any development.
"We see this development on Barrow Island as the key to commercialising the Gorgon gas reserves," said Shell Australia chairman Alan Parsley.
State Development Minister Clive Brown said the Government would consider the proposal but there were no guarantees.
"The Government would only consider this development after a rigorous, accountable and transparent examination of the environmental, social and economic ramifications were undertaken," Mr Brown said.
The Greater Gorgon gasfield, which lies 130km off the Pilbara coast, is Australia's biggest untapped gas resource, with more than 40 trillion cubic feet of gas, more than the North West Shelf project.
In 1998, Gorgon gas development plans were based on building a liquefied natural gas project on the Burrup Peninsula with two processing trains. However, the plans were scuttled due to a collapse in the LNG market because of the Asian economic crisis at the time.