A report released today by the state’s environmental watchdog said the predicted coral loss caused by the Burrup Peninsular development would greatly exceed the 10% limit.

The EPA said Woodside’s current offset program was inadequate to address the potential loss of coral.

However, the report noted that the plant could proceed if Woodside agreed to step-up its offset package and numerous other conditions.

Despite the news, a Woodside spokesperson has told AAP that the project remains on schedule to deliver first gas to Japanese customers by the end of 2010, with no significant effect on the final capital cost expected.

The report has been handed to WA Environment Minister David Templeman who will make the final decision on whether the project can proceed.

The EPA’s report is now subject to a two-week appeals period.

Final environmental approval is expected to be given later this year.