The land, known as Burrup West, was previously granted to ChevronTexaco as an onshore alternative to its preferred Barrow Island location.

With this latest development, Agrium’s proposed $1 billion development is still a long way from feasible with high labour and construction costs, expensive gas and the strong Australian dollar making it a weak economic prospect.

Agrium’s commercial director Don Lauweryssen was reported as saying the new site was preferable to the previous Plenty River site and the company would aim for environmental approval in the next six to nine months.

He was also quoted as saying that WA was no longer Agrium’s prime focus but wanted to keep its options open.

Fellow Canadian Methanex, the world’s leading methanol producer, abandoned plans last year to build a plant either on the Burrup or in Darwin due to construction and feedstock gas costs.

The fertiliser giant Agrium previously had teamed up with ASX-listed junior Plenty River Corporation and constructor Thiess to build the Dampier Nitrogen project but this fell apart in acrimony last October, with both claiming subsequently claiming ownership of the development.

The WA Government intervened and after mediation awarded the site to Plenty River.

The Plenty River proposal is still in play with it and Thiess having the original 67 hectare site and environmental approvals ratified earlier this year. Plenty River recently announced it was negotiating with Dyno Nobel to partner it in a new complex.

This involved a 2300 tonne per day (tpd) ammonia plant, a 1750tpd granular urea plant and a 235,000 tonne per year ammonium nitrate manufacturing facility. It was aiming for project financing in mid 2005 after preparing a feasibility study.