Woodside Petroleum and its North West Shelf partners have given the $1.2 billion Persephone Project off the northwest coast of Australia the development tick of approval.

The project is the third major gas development for the North West Shelf Project in the past six years.

The project will involve a two-well, 7 km subsea tieback from the Persephone Field to the existing North Rankin Complex. Project start-up is expected in early 2018.

Woodside CEO Peter Coleman said the Persephone Project would leverage the company’s core capabilities to unlock undeveloped resources and help maintain offshore supply to the Karratha gas plant.

“The NWS Project celebrated 30 years of domestic gas production and 25 years of LNG exports earlier this year and the approval of Persephone is the next step in continuing this success story,” he said.

Woodside is the operator of the North West Shelf with a 16.7 per cent interest. Other participants in the venture include BHP Billiton Petroleum, BP Developments Australia, Chevron, Japan Australia LNG and Shell.

The news for Persephone’s go-ahead came in the wake of the WA government revealing it had negotiated a new domestic gas commitment from the North West Shelf JV.

Premier Colin Barnett said Woodside and its partners had agreed to reserve domestic gas equivalent in volume to 15 per cent of new approved LNG exports.

The gas will be supplied from new developments at Persephone and Greater Western Flank Two.

In return for the domestic gas commitment, the NWS JV will be able to export a further 86 Mtpa of LNG.

Barnett said he was committed to ensuring the people of WA had a stable supply of gas at a time when the state was on the brink of becoming one of the world’s largest producers of LNG.

“This outcome is consistent with the state’s domestic gas policy, and we will continue to work with other producers to ensure ongoing supplies of domestic gas for WA into the future,” he said.

However, questions about WA’s energy security beyond 2020 remain with existing North West Shelf contracts set to end at the start of next decade.

The North West Shelf is WA’s largest producer of domestic gas, providing about 65 per cent of the State’s total production. However, the new commitment is only equivalent to about 100 terajoules per day of additional gas for the domestic market—about 10% of the current supply.

In a big news week for Woodside, the company also announced the resignation of Executive Director Rob Cole who will replace Reg Nelson as managing director of Beach Energy.

Lauren Barrett can be reached at lbarrett@hartenergy.com.