Environmental approval has been granted for a West Australian gas plant that received a controversial exemption to domestic gas reservation changes.
WA's Environmental Protection Authority on Monday confirmed it had recommended the Waitsia Gas Project Stage 2 proposal for approval, subject to strict conditions on water management, flora and greenhouse gas emissions.
The project is a joint venture between Japanese-owned Mitsui and Beach Energy. The latter's major shareholder is the Kerry Stokes-owned Seven Group Holdings.
Premier Mark McGowan last month announced a tightening of the domestic gas reservation policy, banning the interstate or overseas export of local gas in a bid to ensure the WA market had reliable and affordable energy.
The Waitsia project was given an exemption allowing for some of its gas to be exported as LNG via Woodside's Karratha gas plant.
Mr McGowan at the time refused to say whether he had discussed the exemption with Mr Stokes or his son, Seven Group chief executive Ryan Stokes.
He said the Waitsia project had received an exemption because it was a "shovel-ready" project which would create 200 construction jobs.
WA's change in policy took the oil and gas industry by surprise.
The Australian Petroleum Production and Exploration Association said it had not been consulted on a change it believed would reduce investor confidence.
"It is extremely concerning that with a flick of a pen, and not as much as a discussion with industry, that the future prosperity natural gas can provide would be put at risk," APPEA WA director Claire Wilkinson said.
Mr McGowan rejected APPEA's criticism, saying his government regularly consulted with the industry.
The Waitsia project, which does not involve fracking, is the second project to be assessed under the EPA's new greenhouse gas emissions guidelines.
EPA chair Tom Hatton said the proposal included a plan to deliver net zero emissions by 2050.
"The EPA welcomes the proponent's commitment to emissions targets that go above and beyond the EPA's long-standing policy of offset reservoir emissions," Dr Hatton said.
"The EPA considered potential impacts on flora and vegetation from the clearing of 17 hectares of native vegetation, dust deposition, weeds and dieback could be adequately managed through a recommended flora and vegetation management plan."
A two-week public appeal period will close on September 21 before the state environment minister makes his final decision on the project.