However, the WA Government said it was prepared to consider the use of a small area of the island for LNG production.

State Development Minister Clive Brown said in a statement the government would only consider the island after an environmental study.

"Recognising the important and complex issues such a proposal raises we have not presumed or guaranteed any outcome at this time," Brown said.

ChevronTexaco Australia managing director Rhonda Zygocki said she was confident a strategic environmental, social and economic study would demonstrate that Barrow Island could be sustainably used for the Gorgon development.

"The process established by the WA Government is transparent and provides opportunities for external stakeholders to provide input on the development proposal," Zygocki said.

Shell Australia chairman Alan Parsley said the development of Gorgon was now a really attractive proposition. Royal Dutch Shell owns two-sevenths of Gorgon. ChevronTexaco has four-sevenths and ExxonMobil one-seventh.

"We see this development on Barrow Island as the key to commercialising the Gorgon gas reserves," Parsley said.

The Gorgon gas fields, which are to the west of Barrow Island, contain an estimated 13.8 trillion cubic feet of gas. Proposals to develop the gas have previously been focused on piping it to the mainland, for processing on a site near the existing Woodside Petroleum-managed North West Shelf facility on the Burrup Peninsula.