GLADSTONE'S leaders have welcomed the approval for Arrow's LNG plant on Curtis Island, but a sector expert has warned the government tick doesn't guarantee construction.

Arrow Energy gas plant gets the green light from government

Canaccord Genuity oil and gas analyst Johan Hedstrom said question marks remained over the Shell and PetroChina-owned project.

"The commercial realities need to fall into place and I'm not sure that's working in their favour," he said.

"There's the construction costs which aren't fantastic, the high Australian dollar and a bit of uncertainty on the pricing side."

Last week, gas company Santos revealed it didn't have enough wells to run the GLNG plant at capacity, prompting speculation Arrow could process its gas through that plant.

The $17 billion four-train project, which would deliver more than 4000 construction and operation jobs to the Gladstone region, is slated for final investment decision by the end of this year.

Flynn MP Ken O’Dowd with Federal Environment Minister Greg Hunt.
Flynn MP Ken O’Dowd with Federal Environment Minister Greg Hunt.

Flynn MP Ken O'Dowd welcomed the federal approval on Wednesday, and described the "highest environmental standards" applied to the project.

He said Arrow would contribute $89 million to support the health of the Great Barrier Reef through programs such as the Reef Trust.

The project will require further harbour dredging - more than a million cubic metres.

Meanwhile opponents of the controversial project have vowed to pressure investors to back off.

Greenpeace Queensland campaigner Louise Matthiesson said in Gladstone on Wednesday that environmentalists were taking hope in the lack of final investment decision.

Approval of fourth LNG plant 'insult to injury': Greenpeace

"We're appealing to investment corporations to stay away from these projects because of the damage that they do to the Great Barrier Reef and to the climate," she said.

But Ms Matthiesson said many conditions were just "window dressing".

"(Arrow) will be closer than (the other three plants) to high value dugong and turtle habitat and seagrass beds. The light pollution, noise pollution from construction... shouldn't be allowed next to an endangered species habitat."

But Gladstone Area Promotion and Development Ltd said the approval was "exciting" for the region.

Greenpeeace campaigner Louise Matthiesson speaking in opposition to the Federal Government's approval of the Arrow LNG project at the Gladstone marina.
Greenpeeace campaigner Louise Matthiesson speaking in opposition to the Federal Government's approval of the Arrow LNG project at the Gladstone marina. Luka Kauzlaric

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