The recommendation for conditional environmental approval for the project was announced yesterday and takes it another step towards a final investment decision in the second half of this year.

The project stills need final regulatory approval from the state along with federal environmental approval.

Chevron is seeking approval for a 25 million tonne per annum facility with the foundation phase of the project consisting of two trains with a combined capacity of 8.9MMtpa.

A domestic gas plant will also be part of the foundation phase.

Chevron Australia managing director Roy Krzywosinski said the recommendation marked an important step towards FID on what would be Australia's first ever LNG hub concept.

"The Wheatstone project is set to boost Australia's position as a major LNG player on the world energy stage," he said.

Western Australian Premier Colin Barnett added the approval was "good news" for the Pilbara town of Onslow, which is located near the project site at Ashburton North.

The AAP quoted him as saying the project would employ 5000 people at the peak of construction and bring long-term benefits to Onslow.

EPA chairman Paul Bogel said the EPA recommended the project could be implemented with stringent conditions to limit environmental impacts.

"The assessment of this proposal was complex as it involves impacts and risks to thousands of hectares of marine and terrestrial habitat and significant greenhouse gas emissions,' he said.

"It includes one of Australia's largest marine dredging campaigns, with dredging of 48 million cubic metres over three to four years with impacts and risks to tropical marine habitat including coral reefs. Greenhouse emissions equivalent to 10 million tonnes of carbon dioxide per year are also proposed."

Vogel added a comprehensive set of environmental conditions had been recommended including an agreed offsets package to give a high level of confidence that the EPA's environmental objectives could be met.

The key recommendations include a requirement that Chevron offsets reservoir gas emissions consistent with the Pluto and Gorgon LNG projects.

However, this condition would be waived if the federal government greenhouse gas arrangements were passed.

Other recommendations include an ongoing requirement for independent audit of the energy efficiency and performance of the plant, strict dredging conditions to limit impacts to coral reefs and other marine animals, conditions to limit impacts on marine fauna including whales, turtles and dugong, and offsets to manage the potential impacts to the Cane River Conservation Park, offshore islands and local creek systems.

Chevron Wheatstone project general manager Brian Smith said the company believed the environmental and social impacts of the project could be effectively managed.

"The front-end engineering and design phase of the Wheatstone project is complete and we are continuing work with government to obtain timely project approvals," he said.

However, while the bubbly was probably broken out at Chevron, Barnett may have caused much gnashing of teeth in the offices of companies planning further standalone LNG projects in the state after he signalled that the Wheatstone project would be the last he approved.

Barnett told reporters the project in Ashburton North would probably be the fifth and final major LNG precinct in WA along with the North West Shelf, Pluto, Gorgon and Browse.

"I'm keen that we don't over-invest in the capacity and sites for LNG as the industry grows into maturity," he reportedly told AAP.

"Smaller fields can be brought into existing infrastructure," he added, according to The Australian.

The decision is a clear attempt to push BHP Billiton and ExxonMobil into the arms of one of the existing projects for development of their Scarborough field.

The duo have considered a range of development options, including an onshore plant, floating LNG and making a deal with an existing project, with Woodside Petroleum's Pluto project considered to be a front-runner.

The EPA report on Wheatstone to the WA government is now subject to a two week public appeal period that closes on June 29.

The Wheatstone project will take gas from Chevron's wholly owned Wheatstone field, which straddles WA-17-R and WA-253-P, as well as the Iago field that spans WA-17-R and WA-16-R, of which Shell Development owns a one third share.

The project will also take gas from Apache Energy and Kufpec Australia's Julimar and Brunello fields under a deal that gives the two companies a 13% and 7% equity stake in the Wheatstone facilities respectively.

First LNG shipments are expected by 2016.