Page last updated at 08:40 GMT, Wednesday, 26 August 2009 09:40 UK

Australia island gas deal sealed

A Chinese man loads LPG canisters into a PetroChina vehicle
Much of the gas will be exported to China by Exxon Mobil

Australia has given final approval for a huge natural gas project to be built on an island nature reserve off west Australia.

The project on Barrow Island will be run by US oil firm Chevron, and partners Royal Dutch Shell and Exxon Mobil, and will supply gas to China.

The companies have agreed to protect the local fauna, especially turtles.

However, environmentalists have criticised the A$50bn ($42bn; £25.6bn) project, known as the Gorgon gas field.

Barrow Island is home to a number of endangered, rare and endemic species, including the Barrow Island mouse and the flatback turtle.

Exxon Mobil earlier signed a $41.8m deal to export gas from its share of the project to PetroChina over 20 years.

The deal, to sell 2.25 million tonnes of gas over two decades, is the biggest resources deal in Australia's history.

It comes at a time of tension with China, Australia's biggest export market, over the arrest of an Australian Rio Tinto mining executive for alleged commercial espionage.

Environment Minister Peter Garrett said he was aware of both the economic size of this proposal, but also its potential environmental impact.


"The conditions I have placed on this proposal will make sure that there is no significant [environmental] impact," Mr Garrett said in Canberra.

"Barrow Island has been the location of industrial activities for some decades," he added, saying he had imposed 28 environmental conditions.

But Green politicians reacted angrily to the decision, saying Mr Garrett was signing off on the destruction of a unique environment.

"No environmental conditions can protect the environment of this island," Greens Senator Rachel Siewert said.

"And it is a nonsense for Minister Garrett to hide behind such conditions. It is inevitable that the island will be degraded."

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