The minister has upheld the Gorgon partners’ appeal against the Western Australia Environmental Protection Authority’s June 2006 advisory bulletin that recommended against the Gorgon project’s Environment Impact Statement and Environmental Review and Management Plan.

But McGowan also provided a framework for environmental conditions. These conditions as well as environmental approval from the federal minister will need to be finalised before the project can proceed.

McGowan said the imposition of stringent conditions meant the environmental risks could be managed. These conditions included:

• An additional $60 million commitment by the Gorgon joint venturers to a series of new initiatives to conserve the flatback turtle population and protect other endangered species;

• A Government commitment to expand land and marine parks and reserves in the Pilbara and lower west Kimberley, to protect turtles and improve the management of the existing Montebello/Barrow Islands conservation reserves; and

• A series of stringent conditions on the project concerning dredging, quarantine, greenhouse gas reinjection, flatback turtle monitoring, short-range endemics and subterranean fauna.

Chevron welcomed the announcement, made at 11.30 yesterday morning, Perth time, saying it reaffirmed the Gorgon partners’ belief that the project could proceed in an environmentally responsible way on Barrow Island.

“The venture participants remain committed to working with state and federal governments to ensure this nationally important project proceeds in an environmentally responsible way,” Chevron Australia managing director Jay Johnson said.

Barrow Island is an A-class nature reserve, with significant environmental values due to the absence of introduced species, the Minister said.

“The Government has impressed upon the joint venturers - and they have agreed - that every step must be taken to reduce the likelihood of any non-native species getting a foothold on the island,” he said.

“They have also recognised the importance of investing $32.5million in a flatback turtle conservation program to ensure this species not only survives but their numbers increased.”

McGowan said the new environmental conditions were in addition to an existing commitment by the joint venture partners to provide $40 million to the State to deliver conservation projects to protect native plants and animals in environments similar to Barrow Island.

But environmental groups say the Western Australian Government is being too hasty in its approval of the $15 billion Gorgon Gas project in the Pilbara.

In June, the state’s Environmental Protection Authority (EPA) recommended that the project not proceed, based on its conclusion that environmental risks remained around the flatback turtle populations, dredging, introduction of non-indigenous species and subterranean and short-range invertebrate fauna.

The EPA also advised that the project would be environmentally unacceptable if it did not include a scheme designed to inject a high percentage of the reservoir carbon dioxide (CO2) back into the subsurface 2,000m below Barrow Island, or implement alternative measures to reduce the equivalent amount of reservoir CO2 vented to the atmosphere.

Gorgon operator Chevron plans to use geosequestration to deal with the CO2. This would involve stripping CO2 from the gas stream and re-injecting it into formations more than two kilometres underground rather than releasing it into the atmosphere.

Potentially this will reduce the Gorgon Project’s greenhouse gas emissions by about three million tonnes annually - equivalent to taking about 250,000 large passenger cars off the road. This would also make the Gorgon CO2 injection program the largest of its kind in the world.

The Gorgon CO2 injection proposal is subject to commercial and technical feasibility. Chevron drilled a single CO2 data well on Barrow Island earlier this year at a cost of more than $40 million to add to its understanding of the technical feasibility of CO2 injection.

But geosequestration will add greatly to the cost of an already very expensive project and it much work remains to be done on assessing how this process would work in the Gorgon area.

Conservation Council of WA spokesman Chris Tallentire says the state government needs more time to consider its decision.

"The latest environmental report supplied by the appeals convenor has really only hit Minister McGowan's desk," he told ABC Radio.

"If the decision is rushed we could see a project that could have been constructed on the mainland, where we could have avoided risking our biodiversity, where we could have actually made for better economic outcomes by allowing for downstream processing.”

But the Australian Petroleum Production and Exploration Association said the government has had plenty of time to consider the project’s environmental impacts.

“It is entirely appropriate the proposal by Gorgon to develop an LNG plant and domestic gas processing facility on Barrow Island has been subject to a very thorough and extensive environmental assessment process,” APPEA chief executive Belinda Robinson said.

“This process, and the strict conditions set by the State Government, will ensure the unique environment on Barrow Island remains a priority and is preserved for future generations.

“This decision confirms that major oil and gas projects and the environment can coexist in a way that meets community expectations both in terms of environmental management and economic development.”

On Monday, Chevron said it would spend $US19.6 billion ($A24.9 billion) on exploring and developing new projects next year. This amount includes an undisclosed allocation for "further development of the Greater Gorgon area natural gas resource" within a $US10.6 billion budget for international upstream projects.

Chevron is continuing an active and highly successful exploration program in the Greater Gorgon area. The company made two major discoveries this year – Chandon and Clio. These finds are believed to hold more than 3.5 trillion cubic feet of gas each.

Unlike the earlier Gorgon discoveries, at least one of these finds – Clio – is ‘sweet’, or low in carbon dioxide. This might enable the development to start by using sweet gas while more work is done on developing geosequestration.

But Australia’s overheated resources sector has seen competition for skilled workers, equipment and services placing extreme cost pressures on the Gorgon project, making it uncertain whether one or more of the partners may seek to have the project deferred.