Western Australia: Barrow Island Act 2003 (WA)

Western Australia Barrow Island Act 2003 Western Australia Barrow Island Act 2003 Contents Part 1 — Preliminary 1. Short title 1 2. Commencement 1 3. Terms used 1 4. Notes not part of Act 1 Part 2 — Ratification of Agreement 5. Agreement and variation ratified and implementation authorised 1 Part 3 — Use of reserve under the Land Administration Act 1997 6. Leasing parts of reserve 1 7. Licences affecting reserve 1 8. Easements affecting reserve 1 9. No more than 332 ha in total of uncleared land to be subject of leases, licences or easements 1 10. Status and purposes of reserve not affected 1 Part 4 — Conveyance and underground disposal of carbon dioxide 11. Petroleum Pipelines Act 1969 applies to pipelines on Barrow Island for conveyance of carbon dioxide 1 13. Disposal of carbon dioxide underground 1 Part 5A — Indemnification by State for long‑term liability resulting from underground disposal of carbon dioxide 14A. Terms used 1 14B. Notice that Commonwealth representative is satisfied of certain matters 1 14C. Declaration of liability assumption date 1 14D. State to indemnify 1 14E. Payment under indemnity and appropriation 1 14F. Disclosure of information to Commonwealth representative 1 Part 5 — Miscellaneous 14. Requirement to obtain authorisations under other laws not affected 1 15. Limitations on gas processing projects on Barrow Island 1 16. Land used for gas processing project purpose is rateable land 1 17A. Protection from liability for wrongdoing 1 17. Regulations 1 18. Review of Act on cessation of Agreement 1 Schedule 1 — Gorgon Gas Processing and Infrastructure Project Agreement Schedule 2 — 2013 variation agreement Notes Compilation table 1 Uncommenced provisions table 1 Other notes 1 Defined terms Western Australia Barrow Island Act 2003 An Act — * to ratify, and authorise the implementation of, an agreement between the State and the Gorgon joint venturers relating to a proposal to undertake offshore production of natural gas and other petroleum and a gas processing and infrastructure project on Barrow Island; the agreement having been entered into having regard to the need to minimise environmental disturbance on Barrow Island (a class A nature reserve) and providing for the support of conservation programs relating to Barrow Island and other parts of the State; * to make provisions to enable land on Barrow Island (but no more than 332 ha in total of uncleared land) to be used, under the Land Administration Act 1997, for gas processing project purposes; * to make provisions as to the conveyance and underground disposal of carbon dioxide recovered during gas processing on Barrow Island, and for incidental purposes. [Long title amended: No. 24 of 2013 s. 4.] Part 1 — Preliminary 1. Short title This Act may be cited as the Barrow Island Act 2003. 2. Commencement (1) Subject to subsection (2), this Act comes into operation on the day on which it receives the Royal Assent. [(2) deleted] [Section 2 amended: No. 13 of 2005 s. 48(2).] 3. Terms used In this Act — 2013 variation agreement means the agreement a copy of which is set out in Schedule 2; Barrow Island lease means the petroleum lease dated 27 February 1967 granted under the Petroleum Act 1936 and registered as Number 1H and named "Barrow Island" under that Act and includes that lease as renewed, substituted or varied; Note for this definition: Though repealed by the Petroleum and Geothermal Energy Resources Act 1967, the Petroleum Act 1936 continues to apply to the Barrow Island lease and renewals of it (see the Petroleum and Geothermal Energy Resources Act 1967 s. 134). Barrow Island lessee means the lessee under the Barrow Island lease; BI Act Minister means the Minister to whom the administration of this Act is for the time being committed; CALM Act Minister means the Minister to whom the administration of the Conservation and Land Management Act 1984 is for the time being committed; carbon dioxide means gases consisting predominantly of carbon dioxide recovered during gas processing on Barrow Island; gas means natural gas and other petroleum; gas processing project purpose includes, without limiting the ordinary meaning of the term, any of the following — (a) the conveyance by pipeline of gas or a product of gas processing; (b) the provision of support facilities and services — (i) for any gas processing project on Barrow Island; or (ii) for purposes of the Barrow Island lease; (c) the provision of emergency shelter facilities on Barrow Island; (d) any other purpose ancillary or beneficial to a gas processing project purpose; LA Act means Land Administration Act 1997; LA Act Minister has the meaning given to "Minister" in the LA Act section 3(1); the Agreement means the Gorgon Gas Processing and Infrastructure Project Agreement, a copy of which is set out in Schedule 1, and, except in section 5(1), includes the Agreement as varied from time to time in accordance with its provisions and by the 2013 variation agreement; the reserve means class A reserve no. 11648 comprising the whole of Barrow Island that is reserved under the LA Act section 41 for the purpose of conservation of flora and fauna. [Section 3 amended: No. 24 of 2013 s. 5.] 4. Notes not part of Act Notes in this Act are provided to assist understanding and do not form part of the Act. Part 2 — Ratification of Agreement 5. Agreement and variation ratified and implementation authorised (1) The Agreement is ratified. (2A) The 2013 variation agreement is ratified. (2) The implementation of the Agreement is authorised. (3) Without limiting or otherwise affecting the application of the Government Agreements Act 1979, the Agreement operates and takes effect despite any other Act or law. [Section 5 amended: No. 24 of 2013 s. 6.] Part 3 — Use of reserve under the Land Administration Act 1997 6. Leasing parts of reserve (1) The LA Act Minister may, under the LA Act section 79, grant a lease of land that is part of the reserve for a gas processing project purpose, even though that land is part of the reserve, but subject to section 9. (2) For the purposes of subsection (1), the LA Act is to be read as requiring the consent of the BI Act Minister for the LA Act Minister to do any of the following in relation to a lease referred to in that subsection — (a) grant the lease; (b) fix the duration of the lease under the LA Act section 79(1)(b); (c) determine an option for the renewal of the lease under the LA Act section 79(3)(a); (d) extend the term of or vary a provision of the lease under the LA Act section 79(4); (e) give an approval under the LA Act section 18(7) in relation to the lease where the lease is granted to a person who is not a party to the Agreement; (f) accept the surrender of the lease under the LA Act section 81(1); (g) order the lease to be forfeited under the LA Act section 35(3); (h) remove fixtures from, or cause improvements to, the leased land under the LA Act section 92(3); (i) grant an option for the lease under the LA Act section 88(1); (j) vary a condition of a sublease of the lease under the LA Act section 81(3). (3) For the purposes of subsection (1), the LA Act is to be read as requiring the consent of the CALM Act Minister for the LA Act Minister to determine or vary, under the LA Act section 79(1)(c), a condition of a lease referred to in subsection (1) that relates to or affects the conservation of flora and fauna on the reserve. (4) The LA Act Minister is not to grant a lease referred to in subsection (1) in relation to an area of the reserve that would, if granted, coincide with or overlap the area to which the Barrow Island lease relates, unless the Barrow Island lease — (a) has been surrendered under the Petroleum Act 1936 section 66 in respect of the area to which the lease relates; or (b) is otherwise no longer in force in respect of the area to which the lease relates. Note for this subsection: Though repealed by the Petroleum and Geothermal Energy Resources Act 1967, the Petroleum Act 1936 continues to apply to the Barrow Island lease and renewals of it (see the Petroleum and Geothermal Energy Resources Act 1967 s. 134). (5) For the purposes of granting a lease referred to in subsection (1), the Petroleum Act 1936 section 66 is to be read as enabling the Barrow Island lessee, at any time with the consent of the Governor, to surrender any part of the Barrow Island lease including the natural surface and below the natural surface to a depth specified in the instrument of surrender. (6) The LA Act sections 12 and 14 do not apply to a lease referred to in subsection (1) or a proposed lease of that kind. (7) The LA Act section 18 does not apply to a lease referred to in subsection (1) that is granted to a person who is a party to the Agreement. [Section 6 amended: No. 4 of 2023 s. 103.] 7. Licences affecting reserve (1) The LA Act Minister may, under the LA Act section 91, grant a licence in respect of land that is part of the reserve for a gas processing project purpose, even though that land is part of the reserve, but subject to section 9. (2) For the purposes of subsection (1), the LA Act is to be read as requiring the consent of the BI Act Minister and, if the Barrow Island lessee's consent is required under the Barrow Island lease, the Barrow Island lessee for the LA Act Minister to do any of the following in relation to a licence referred to in that subsection — (a) grant the licence; (b) fix or extend the duration of the licence under the LA Act section 91(2)(a); (c) amend a provision of the licence under the LA Act section 91(2)(d). (3) For the purposes of subsection (1), the LA Act is to be read as requiring the consent of the CALM Act Minister for the LA Act Minister to determine, under the LA Act section 91(2)(b), or vary, a condition of a licence referred to in subsection (1) that relates to or affects the conservation of flora and fauna on the reserve. (4) For the purposes of subsection (1), the LA Act is to be read as requiring the consent of the BI Act Minister for the LA Act Minister to do any of the following in relation to a licence referred to in that subsection — (a) give an approval under the LA Act section 18(7) in relation to the licence where the licence is granted to a person who is not a party to the Agreement; (b) terminate the licence under the LA Act section 91(3). (5) For the purposes of subsection (1), the LA Act section 91(5) is to be read as providing that nothing in that Act prevents the simultaneous existence on the same area of the reserve of — (a) a licence referred to in subsection (1); and (b) a mining, petroleum or geothermal energy right, as that term is defined in the LA Act section 3(1), including a right under the Barrow Island lease. (6) The LA Act sections 12 and 14 do not apply to a licence referred to in subsection (1) or a proposed licence of that kind. (7) The LA Act section 18 does not apply to a licence referred to in subsection (1) that is granted to a person who is a party to the Agreement. [Section 7 amended: No. 35 of 2007 s. 90.] 8. Easements affecting reserve (1) The LA Act Minister may, under the LA Act section 144, grant an easement in respect of land that is part of the reserve for a gas processing project purpose, even though that land is part of the reserve, but subject to section 9. (2) For the purposes of subsection (1) — (a) while the Barrow Island lease is in force — (i) the references in the LA Act Part 8 to the management body are to be read as if they were references to the BI Act Minister; and (ii) the references in the LA Act Part 8 to the lessee or any other person having any interest, right, title, or power in respect of the relevant land are to be read as if they were references to — (I) each person to whom is granted a lease referred to in section 6(1), a licence referred to in section 7(1) or an easement referred to in section 8(1); and (II) if the Barrow Island lessee's consent is required under the Barrow Island lease, the Barrow Island lessee; and (b) when the Barrow Island lease is not in force, the references in the LA Act Part 8 to the management body are to be read as if they were references to the BI Act Minister. (3) For the purposes of subsection (1), the LA Act is to be read as requiring the consent of the CALM Act Minister for the LA Act Minister to specify, under the LA Act section 144(1)(b), or vary, a condition of an easement referred to in subsection (1) that relates to or affects the conservation of flora and fauna on the reserve. (4) For the purposes of subsection (1), the LA Act is to be read as requiring the consent of the BI Act Minister for the LA Act Minister to do any of the following in relation to an easement referred to in that subsection — (a) give an approval under the LA Act section 18(7) in relation to the easement where the easement is granted to a person who is not a party to the Agreement; (b) order the easement to be cancelled under the LA Act section 145; (c) order the easement to be forfeited under the LA Act section 35(3). (5) The LA Act sections 12, 14 and 44 do not apply to an easement referred to in subsection (1), or a proposed easement of that kind. (6) The LA Act section 18 does not apply to an easement referred to in subsection (1) that is granted to a person who is a party to the Agreement. [Section 8 amended: No. 4 of 2023 s. 104.] 9. No more than 332 ha in total of uncleared land to be subject of leases, licences or easements (1) The total area of uncleared land made up by the parts of the reserve that are the subject of leases referred to in section 6(1), licences referred to in section 7(1) or easements referred to in section 8(1) is not to exceed 332 ha. (2) In subsection (1) — uncleared land means land that is not cleared at the time of the grant, in relation to the land, of a lease referred to in section 6(1), a licence referred to in section 7(1) or an easement referred to in section 8(1). [Section 9 amended: No. 24 of 2013 s. 7.] 10. Status and purposes of reserve not affected (1) Despite the grant of a lease referred to in section 6(1), a licence referred to in section 7(1) or an easement referred to in section 8(1) — (a) the reserve remains a class A reserve under the LA Act reserved for the purpose of conservation of flora and fauna; and (b) the grant is not to be treated as reducing the area of, or excising an area from, the reserve for the purposes of the LA Act section 42(4). (2) Nothing in this Act affects the operation of the LA Act section 45(3). Part 4 — Conveyance and underground disposal of carbon dioxide 11. Petroleum Pipelines Act 1969 applies to pipelines on Barrow Island for conveyance of carbon dioxide (1) The provisions of the Petroleum Pipelines Act 1969 apply as if there were included in the definition of "petroleum" in section 4(1) of that Act a reference to carbon dioxide. (2) Despite paragraph (b)(ii) of the definition of "pipeline" in section 4(1) of the Petroleum Pipelines Act 1969, that definition is to be treated as including a pipeline for the conveyance of carbon dioxide to a place on Barrow Island for the purpose of disposing of the carbon dioxide in an underground reservoir or other subsurface formation. [12. Deleted: No. 13 of 2005 s. 48(3) 1.] 13. Disposal of carbon dioxide underground (1) A person must not inject carbon dioxide into an underground reservoir or other subsurface formation for the purpose of disposing of the carbon dioxide unless the person has the BI Act Minister's approval under this section to do so. Penalty: $50 000. (2) An application for the BI Act Minister's approval under this section — (a) is to be made in the form and manner approved by the BI Act Minister; and (b) is to be accompanied by particulars of — (i) the position, size, capacity and geological structure of the underground reservoir or other subsurface formation; and (ii) the rate of the proposed disposal of the carbon dioxide, the volume and composition of the carbon dioxide proposed to be disposed of and the expected duration of the proposed disposal; and (iii) the methods proposed to be used for the injection and disposal of the carbon dioxide; and (iv) the capability of the underground reservoir or other subsurface formation to confine the disposed carbon dioxide; and (v) technical advice and data available to the applicant in relation to the proposed disposal; and (c) is to be accompanied by the prescribed fee, if any. (3) The BI Act Minister may, at any time, require the applicant — (a) to give the BI Act Minister, within the time specified by that Minister, further information in writing in connection with the application; or (b) to inform such other persons as the BI Act Minister considers necessary that the application has been made. (4) In considering an application under this section the BI Act Minister may seek, and have regard to, the advice or information of any person on a matter that in the opinion of that Minister is relevant to the proposed disposal. (5) The BI Act Minister is not to give his or her approval under this section unless the BI Act Minister has consulted, and had regard to the advice, if any, of — (a) the LA Act Minister; and (b) the CALM Act Minister; and (c) any other person who is required to be informed under subsection (3)(b) of the application. (6) The BI Act Minister may grant his or her approval under this section subject to any condition or restriction including, without limiting the generality of the Minister's discretion, a condition as to — (a) the payment of money to the State; or (b) indemnification of the State; or (c) the transferability or otherwise of the approval. Part 5A — Indemnification by State for long‑term liability resulting from underground disposal of carbon dioxide [Heading inserted: No. 13 of 2015 s. 4.] 14A. Terms used In this Part — CO2 means carbon dioxide; CO2 disposal management plan has the meaning given in the section 13 approval in clause 1 of the collateral deed; CO2 injection cessation date has the meaning given in the section 13 approval in clause 1 of the collateral deed; CO2 injection operations means the disposal of CO2 recovered during gas processing on Barrow Island undertaken as part of the Project by — (a) injecting that CO2 into the formation as part of a process known as geosequestration; and (b) establishing and operating infrastructure and facilities for that purpose and conducting associated monitoring activities, in accordance with the Agreement and the section 13 approval; CO2 injection site closure notice means a notice issued no earlier than 15 years after the CO2 injection cessation date in accordance with clause 8 of the collateral deed; collateral deed means the CO2 Disposal by Injection — Collateral Deed dated 14 September 2009 executed by the then Joint Venturers (Chevron (TAPL) Pty Ltd (ABN 18 081 647 047), Mobil Australia Resources Company Pty Limited (ABN 38 000 113 217) and Shell Development (Australia) Proprietary Limited (ABN 14 009 663 576)) in favour of the State and given in compliance with condition 2 of the section 13 approval; common law liability means liability for damages — (a) in an amount claimed on the basis of a common law cause of action and either — (i) awarded by a court; or (ii) payable under a settlement, if the settlement was reached with the prior approval of the Commonwealth representative and the BI Act Minister as to the amount; and (b) not arising as a result of a failure by any of the Joint Venturers to act in good faith or without malice, fraud or recklessness; Commonwealth representative means — (a) the Minister of the Commonwealth to whom the administration of the Offshore Petroleum and Greenhouse Gas Storage Act 2006 (Commonwealth) is from time to time committed; or (b) another Minister or official of the Commonwealth that is from time to time notified to the BI Act Minister by the Minister referred to in paragraph (a); formation has the meaning given in the section 13 approval; Gorgon CO2 means CO2 recovered during processing of gas or other petroleum from the Title Areas or, in accordance with clause 18 of the Gorgon Agreement, from the Greater Gorgon Area, the Barrow Island Lease or other areas and includes flue gas from the treatment plant constructed and operated by the Joint Venturers as part of the Project; Greater Gorgon Area has the meaning given in clause 1 of the Agreement; holding company has the meaning given in the Corporations Act 2001 (Commonwealth) section 9; independent third party means a natural person or entity who is not — (a) the State or the Commonwealth; or (b) any of the Joint Venturers; or (c) a related entity of any of the Joint Venturers; Joint Venturers has the meaning given in the Agreement and includes each of the former Joint Venturers; leakage means the physical leakage of CO2 from the formation into the atmosphere, biosphere or hydrosphere, other than as predicted in the section 13 approval; liability assumption date means the day declared by the BI Act Minister as the liability assumption date by notice under section 14C(1); Project has the meaning given in clause 1 of the Agreement; related entity means — (a) a holding company; or (b) a subsidiary; or (c) a subsidiary of a holding company; or (d) an Associated Entity (as defined in clause 1 of the Agreement); section 13 approval means the document dated 14 September 2009 setting out the conditions and restrictions of the BI Act Minister's approval granted to the then Joint Venturers (Chevron (TAPL) Pty Ltd (ABN 18 081 647 047), Mobil Australia Resources Company Pty Limited (ABN 38 000 113 217) and Shell Development (Australia) Proprietary Limited (ABN 14 009 663 576)) under section 13 to inject CO2 into the formation as varied, added to or substituted for in accordance with condition 19 of that document and, for the avoidance of doubt, includes the collateral deed and the CO2 disposal management plan; subsidiary has the meaning given in the Corporations Act 2001 (Commonwealth) section 9; Title Areas has the meaning given in clause 1 of the Agreement. [Section 14A inserted: No. 13 of 2015 s. 4.] 14B. Notice that Commonwealth representative is satisfied of certain matters (1) The BI Act Minister may, after the expiration of the 15 year period beginning on the CO2 injection cessation date, request the Commonwealth representative to give the BI Act Minister notice that the Commonwealth representative is satisfied in respect of the matters listed in subsection (2). (2) The matters in respect of which the Commonwealth representative must be satisfied are as follows — (a) the Gorgon CO2 injected into the formation is behaving as predicted in the modelling of the plume provided by the Joint Venturers to the BI Act Minister either — (i) as part of the application under section 13 that resulted in the grant of the section 13 approval; or (ii) in subsequent refinements of that modelling accepted by the BI Act Minister in accordance with the section 13 approval, and there is no significant risk of leakage; (b) there is no significant risk that the CO2 in the formation will have a significant adverse impact on the geotechnical integrity of the whole or a part of a geological formation or a geological structure; (c) there is no significant risk that the CO2 in the formation will have a significant adverse impact on the environment, or other geological resources, including groundwater; (d) there is no significant risk that the CO2 in the formation will have a significant adverse impact on human health or safety; (e) for at least 15 years since the CO2 injection cessation date there have not been any operations to inject CO2 into the formation; (f) for at least 15 years since the CO2 injection cessation date there have not been any operations to inject any other substances into the formation other than where that was necessary for legitimate and appropriate plume monitoring and management activities; (g) the BI Act Minister has advised that he or she has issued or is intending to issue a CO2 injection site closure notice in accordance with the section 13 approval. [Section 14B inserted: No. 13 of 2015 s. 4.] 14C. Declaration of liability assumption date (1) The BI Act Minister must, by notice published in the Gazette, declare a particular day as the liability assumption date if — (a) the Commonwealth representative has given the notice requested under section 14B(1); and (b) the BI Act Minister has issued a CO2 injection site closure notice. (2) The liability assumption date must not be earlier than the day on which the notice under subsection (1) is published. [Section 14C inserted: No. 13 of 2015 s. 4.] 14D. State to indemnify The State will indemnify the Joint Venturers for their common law liability to independent third parties arising after the liability assumption date for loss or damage caused by the injection of Gorgon CO2 in the formation where that loss or damage is attributable to an act done, or omitted to be done, in the carrying out of CO2 injection operations under the authority of the section 13 approval. [Section 14D inserted: No. 13 of 2015 s. 4.] 14E. Payment under indemnity and appropriation The payment of any money under the indemnity in section 14D is to be made by the Treasurer and charged to the Consolidated Account, which this section appropriates to the necessary extent. [Section 14E inserted: No. 13 of 2015 s. 4.] 14F. Disclosure of information to Commonwealth representative (1) The BI Act Minister may, at any time, disclose to the Commonwealth representative information or any document that — (a) relates to CO2 injection operations or to a proposal by the Joint Venturers that relates to CO2 injection operations; or (b) is relevant to — (i) a matter listed in section 14B(2); or (ii) the existence (or otherwise) or extent of liability mentioned in section 14D. (2) Subsection (1) applies to information or documents whether given to the BI Act Minister by the Joint Venturers, produced by or on behalf of the BI Act Minister or otherwise obtained by the BI Act Minister. [Section 14F inserted: No. 13 of 2015 s. 4.] Part 5 — Miscellaneous 14. Requirement to obtain authorisations under other laws not affected (1) The grant of — (a) a lease referred to in section 6(1); or (b) a licence referred to in section 7(1); or (c) an easement referred to in section 8(1); or (d) an approval under section 13, does not affect the requirement to obtain under any written law (including the Petroleum Pipelines Act 1969 as modified by section 11) a licence, permit, lease, approval, consent, registration, reservation, exemption or any other kind of authorisation to do an act that would be unlawful if done without the relevant authorisation. (2) A requirement to obtain under the LA Act an authorisation referred to in subsection (1) is subject to the modifications to the LA Act made under Part 3. (3) Nothing in subsection (1) affects the operation of the Agreement. 15. Limitations on gas processing projects on Barrow Island (1) Any gas processing project on Barrow Island must be the subject of a Government agreement as defined in the Government Agreements Act 1979 section 2. (2) Subsection (1) does not apply to gas processing under the Barrow Island lease. (3) After the Barrow Island Coordination Council is formed under clause 13 of the Agreement, a person cannot operate a gas processing project on Barrow Island unless the person is a participant in the Council. 16. Land used for gas processing project purpose is rateable land For the avoidance of doubt in the interpretation of the Local Government Act 1995 section 6.26(2)(a)(i), it is declared that any part of the reserve that, at a particular time, is being used for a gas processing project purpose, is not being used or held for a public purpose. 17A. Protection from liability for wrongdoing (1) An action in tort does not lie against a person for anything that the person has done, in good faith, in the performance or purported performance of a function under this Act. (2) The protection given by subsection (1) applies even though the thing done as described in that subsection may have been capable of being done whether or not this Act had been enacted. (3) Despite subsection (1), the State is not relieved of any liability that it might have for another person having done anything as described in that subsection. (4) In this section a reference to the doing of anything includes a reference to the omission to do anything. [Section 17A inserted: No. 13 of 2015 s. 5.] 17. Regulations The Governor may make regulations prescribing all matters that are required or permitted by this Act to be prescribed, or are necessary or convenient to be prescribed, for giving effect to the purposes of this Act. 18. Review of Act on cessation of Agreement (1) In the event that the Agreement ceases under clause 4(1) or 8(6) of the Agreement, the BI Act Minister is to carry out a review of the operation and effectiveness of this Act as soon as is practicable after the day on which the Agreement ceases, and in the course of that review that Minister is to consider and have regard to — (a) the need for the continuation of the operation of this Act; and (b) such other matters as appear to that Minister to be relevant to the operation and effectiveness of this Act. (2) The BI Act Minister is to prepare a report based on his or her review made under subsection (1) and, as soon as is practicable after the preparation of the report, is to cause the report to be laid before each House of Parliament. Schedule 1 — Gorgon Gas Processing and Infrastructure Project Agreement [s. 3] THIS AGREEMENT is made this 9th day of September 2003 BETWEEN: THE HONOURABLE GEOFFREY IAN GALLOP, B.Ec., MA., MPhil., DPhil., M.L.A., Premier of the State of Western Australia, acting for and on behalf of the said State and its instrumentalities from time to time (hereinafter called "the State") of the one part; and CHEVRONTEXACO AUSTRALIA PTY. LTD. ABN 29 086 197 757 of Level 24 QV1 Building, 250 St George's Terrace, Perth, Western Australia, TEXACO AUSTRALIA PTY. LTD. ABN 18 081 647 047 of Level 24 QV1 Building, 250 St George's Terrace, Perth, Western Australia, MOBIL AUSTRALIA RESOURCES COMPANY PTY. LIMITED ABN 38 000 113 217 of 12 Riverside Quay, Southbank, Melbourne, Victoria and SHELL DEVELOPMENT (AUSTRALIA) PROPRIETARY LIMITED ABN 14 009 663 576 of Level 28 QV1 Building, 250 St George's Terrace, Perth, Western Australia (hereinafter collectively called "the Joint Venturers" in which term shall be included their respective successors and permitted assigns) of the other part. WHEREAS: A. The Joint Venturers are the holders of the Title Areas (as hereinafter defined) granted under the Petroleum (Submerged Lands) Act 1967 of the Commonwealth and propose to undertake offshore production of natural gas and other petroleum from those areas and a gas processing and infrastructure project as hereinafter defined as the Project on Barrow Island. B. The State, for the purpose of promoting industrial development in Western Australia and the supply of gas to the mainland of Western Australia, desires to facilitate the establishment of the Project upon and subject to the terms of this Agreement. C. The State and the Joint Venturers recognise the need for employment and training opportunities for the Western Australian workforce and for participation in the proposed development by suppliers manufacturers contractors and consultants resident in Western Australia. D. The State and the Joint Venturers acknowledge the high biodiversity value on Barrow Island and the need for this Agreement to provide for net environmental, social and economic benefits for current and future generations and the need for minimisation of environmental impact of the Project on Barrow Island. NOW THIS AGREEMENT WITNESSES: Definitions 1. In this Agreement subject to the context: "advise", "apply", "approve", "approval", "consent", "certify", "direct", "notice", "notify", "request", or "require", means advise, apply, approve, approval, consent, certify, direct, notice, notify, request or require in writing as the case may be and any inflexion or derivation of any of those words has a corresponding meaning; "Associated Entity" means: (a) in relation to a Joint Venturer other than Shell Development (Australia) Proprietary Limited ("Shell"): (i) a body corporate, partnership or other legal entity which is directly or indirectly controlled by the Joint Venturer; (ii) a body corporate, partnership or other legal entity which directly or indirectly controls the Joint Venturer; or (iii) a body corporate, partnership or other legal entity which is directly or indirectly controlled by a body corporate, partnership or other legal entity which directly or indirectly controls the Joint Venturer; and (b) in relation to Shell: (i) N.V. Koninklijke Nederlandsche Petroleum Maatscappij ("Royal Dutch"); (ii) The 'Shell' Transport and Trading Company, plc ("Shell Transport"); and (iii) any company (other than Shell) which is for the time being directly or indirectly controlled by Royal Dutch and Shell Transport or either of them. For the purpose of this definition, a body corporate, partnership or other legal entity ("Entity") is directly controlled by another Entity or Entities holding shares carrying the majority of votes exercisable at a general meeting of the first mentioned Entity; and a particular Entity is indirectly controlled by an Entity or Entities (the "parent Entity or Entities") if a series of Entities can be specified, beginning with the parent Entity or Entities and ending with the particular Entity, so related that each Entity in the series, except the parent Entity or Entities, is directly controlled by one or more of the Entities earlier in the series; "approved proposal" means a proposal approved or deemed to be approved under this Agreement; "Barrow Island Coordination Council" or "BICC" means the group referred to in clause 13; "BICC Participants" means the participants in the BICC from time to time; "Barrow Island lease" has the meaning given to it in the Ratifying Act; "BI Lessee" means the lessee from time to time under the Barrow Island lease; "CALM Act" means the Conservation and Land Management Act 1984; "CALM Act Minister" means the Minister to whom the administration of the CALM Act is for the time being committed; "Commencement Date" means the date on which the Ratifying Act comes into operation; "Commonwealth" means the Commonwealth of Australia and includes the Government for the time being thereof; "DCLM" means the Department of Conservation and Land Management referred to in section 32 of the CALM Act; "Domgas Project" means any domestic gas treatment plant within the Gas Processing Area on Barrow Island and a pipeline connection or connections to deliver natural gas from that plant to domestic gas infrastructure on the mainland of Western Australia; "EP Act" means the Environmental Protection Act 1986; "Executive Director" means the executive director of DCLM referred to in section 36(1) of the CALM Act; "First long term lease" means the first long term lease granted by the State to the Joint Venturers for the purposes of establishment of a gas processing plant pursuant to an approved proposal under clause 7 and includes that lease, if renewed or varied, as so renewed or varied; "Gas Processing Area" means the areas of Barrow Island not exceeding in aggregate 300 hectares, as described in section 9 of the Ratifying Act; "gas processing project purpose" has the meaning given to it in the Ratifying Act; "Greater Gorgon Area" means the areas which are the subject of Retention Leases WA‑15‑R, WA‑17‑R, WA‑18‑R, WA‑19‑R, WA‑20‑R, WA‑21‑R, WA‑22‑R, WA‑23‑R, WA‑24‑R, WA‑25‑R and WA‑26‑R, Exploration Permits WA‑253‑P, WA‑267‑P and WA‑268‑P and graticular blocks 439, 440, 511, 512, 583 and 584 of Exploration Permit WA‑205‑P, or of titles derived from those titles, which are held during the term of this Agreement by any person under such titles granted pursuant to the Petroleum (Submerged Lands) Act 1967 of the Commonwealth; "LA Act" means the Land Administration Act 1997, as amended by the Ratifying Act; "laws relating to native title" means laws applicable from time to time in Western Australia in respect of native title and includes the Native Title Act 1993 (Commonwealth); "local government" means a local government established under the Local Government Act 1995; "Minister" means the Minister in the Government of the State for the time being responsible for the administration of the Act to ratify this Agreement and pending the passing of that Act means the Minister for the time being designated in a notice from the State to the Joint Venturers and includes the successors in office of the Minister; "month" means calendar month; "Net Conservation Benefits" means demonstrable and sustainable additions to or improvements in biodiversity conservation values of Western Australia targeting, where possible, the biodiversity conservation values affected or occurring in similar bioregions to Barrow Island; "person" or "persons" includes bodies corporate; "petroleum" has the meaning given to it in the Petroleum (Submerged Lands) Act 1967 of the Commonwealth; "Project" means the processing of gas or other petroleum from within the Title Areas and, subject to this Agreement, gas or other petroleum from the Greater Gorgon Area and other areas to produce, by staged phases of development, some or all of: (a) liquefied natural gas or other petroleum based products for sale within Australia and/or overseas; (b) natural gas or processed natural gas or other petroleum based products for sale or industrial use on Barrow Island; and (c) processed natural gas and the pipeline transportation of such gas to the mainland of Western Australia for sale within Australia, and all related activities including construction, operation and maintenance of pipelines, transport, carbon dioxide disposal and other ancillary services and facilities; "Ratifying Act" means the Act that ratifies this Agreement; "Title Areas" means the areas which, at the Commencement Date, are the subject of Retention Leases WA‑2‑R, WA‑3‑R, WA‑4‑R, WA‑5‑R, WA‑14‑R and WA‑16‑R and graticular blocks 153, 154, 225, 226, 296, 297, 368 and 369 within Exploration Permit WA‑205‑P and in which interests are held during the term of this Agreement by any or all of the Joint Venturers under titles granted pursuant to the Petroleum (Submerged Lands) Act 1967 of the Commonwealth; "this Agreement", "hereof" and "hereunder" refer to this Agreement as from time to time added to, varied or amended. Interpretation 2. (1) In this Agreement: (a) monetary references are references to Australian currency unless otherwise specifically expressed; (b) power given under any clause other than clause 24 to extend any period or date shall be without prejudice to the power of the Minister under clause 24; (c) clause headings do not affect interpretation or construction; (d) words in the singular shall include the plural and words in the plural shall include the singular according to the requirements of the context; (e) one gender includes the other genders; (f) a covenant or agreement by more than one person binds, and is enforceable against, those persons jointly and each of them severally; (g) reference to an Act includes the amendments to that Act for the time being in force and also any Act passed in substitution therefor or in lieu thereof and the regulations for the time being in force thereunder; (h) reference to any other document includes that document as from time to time added to, varied or amended and notwithstanding any change in the identity of the parties; (i) reference to a clause or schedule is a reference to a clause or schedule to this Agreement, and a reference to a subclause or paragraph is a reference to the subclause of the clause or paragraph of the clause or subclause as the case may be in, or in relation to, which the reference is made; and (j) "including" means "including, but not limited to". (2) Nothing in this Agreement shall be construed to exempt the State or the Joint Venturers from compliance with or to require the State or the Joint Venturers to do anything contrary to any law relating to native title or any lawful obligation or requirement imposed on the State or the Joint Venturers as the case may be pursuant to any law relating to native title. (3) Nothing in this Agreement shall be construed to exempt the Joint Venturers from compliance with any requirement in connection with the protection of the environment arising out of or incidental to their activities under this Agreement that may be made pursuant to the EP Act or the Ratifying Act. Ratification and operation 3. (1) The State shall introduce and sponsor a Bill in the State Parliament of Western Australia to ratify this Agreement and endeavour to secure its passage and commencement as an Act prior to 31 December 2003 or such later date as may be agreed between the parties hereto. (2) The provisions of this Agreement other than this clause and clauses 1 and 2 will not come into operation until the Bill referred to in subclause (1) has been passed by the State Parliament of Western Australia and comes into operation as an Act. (3) If by 31 December 2003 or later agreed date the said Bill has not commenced to operate as an Act then, unless the parties hereto otherwise agree, this Agreement will then cease and determine and no party hereto will have any claim against any other party hereto with respect to any matter or thing arising out of, done, performed, or omitted to be done or performed under this Agreement. (4) On the said Bill commencing to operate as an Act all the provisions of this Agreement will operate and take effect notwithstanding the provisions of any Act or law. Preparatory work 4. (1) The Joint Venturers shall continue their field and office geological, geotechnical, engineering, environmental, social impact, heritage, marketing and finance studies and investigations into other matters as they consider necessary to enable them to finalise and to submit proposals under this Agreement and shall report in writing thereon to the State at quarterly intervals or such longer periods as may be approved by the Minister. If such preparatory work leads the Joint Venturers to conclude at any time prior to submission of their complete detailed proposals under clause 7(1) that the Project cannot successfully be established in accordance with this Agreement, the Joint Venturers shall consult with the Minister thereon and following such consultation, if they are still of that mind, they may within 21 days after the consultation notify the Minister that they do not intend to submit such proposals and, upon that notification, this Agreement shall cease and determine. (2) With each report pursuant to subclause (1) the Joint Venturers shall also advise the State of the then expected Western Australian and other Australian content of their proposed works and, in relation thereto, the matters the subject of clause 15(4). (3) The Joint Venturers shall co‑operate with the State and consult with the representatives or officers of the State regarding matters referred to in subclause (1) and any other relevant studies in relation thereto that the Minister may wish to undertake and shall join with the State in any studies into infrastructure that the Minister and the Joint Venturers agree should be undertaken. (4) If so requested by the Joint Venturers the State shall, at the cost of the Joint Venturers, exercise any powers available to it pursuant to the Barrow Island lease in relation to access for the Joint Venturers to land within that lease for the purposes of this clause. (5) For the purpose of this Agreement, the Joint Venturers in relation to any land the subject of approved proposals or proposed as land to be granted in accordance with proposals under this Agreement shall be deemed to be within the expression "the owner of any land" for the purposes of section 18 of the Aboriginal Heritage Act 1972. Overall development ‑ existing infrastructure 5. (1) Having regard to the Class A Nature Reserve status of Barrow Island, the provisions of the Ratifying Act, the need to minimise environmental disturbance and the impact on conservation values on Barrow Island by the avoidance of duplication of services, facilities and infrastructure and that no more than 300 hectares of uncleared land (as described in section 9 of the Ratifying Act) is available for this and other future gas processing developments on Barrow Island, the Joint Venturers in their planning and preparations for proposals shall take into account and make provision as far as practicable for use and sharing of services, facilities and infrastructure. The Joint Venturers and the State shall co‑operate and consult with each other regarding these matters, State Government policies and development objectives, the Joint Venturers' commercial requirements and any other relevant matters that the Minister or the Joint Venturers may wish to consider. (2) Subject to clause 21 the Joint Venturers shall, if so requested by the Minister or by another existing or prospective occupant of Barrow Island, enter into negotiations for the sharing or supply, in both cases on reasonable commercial terms and subject to there being spare capacity available, of the Joint Venturers' services, facilities and infrastructure on Barrow Island. The implementation of such arrangements shall not be precluded by this Agreement. Reservation of areas 6. (1) The Gas Processing Area shall be reserved by the State solely for the provision of land areas for the establishment of projects to process or use natural gas and other petroleum from the Title Areas and the Greater Gorgon Area (together with ancillary processing or use of gas and other petroleum from the Barrow Island lease or elsewhere if approved by the Minister), and for associated activities to such projects and the Minister shall not consent to the grant of any lease, easement or licence under the Ratifying Act which is inconsistent with this reservation. (2) For the period from the Commencement Date to 31 December 2009 the State shall reserve to the Joint Venturers areas within the Gas Processing Area of 150 hectares in the aggregate from which they may seek the grant of long term leases of land for the purposes of the Project and easements for carbon dioxide pipelines, control lines and ancillary services under the LA Act in accordance with approved proposals. (3) The State shall also reserve areas within the Gas Processing Area of not less than 50 hectares for the grant of easements under the LA Act for petroleum pipelines, control lines and ancillary services associated with gas and other petroleum processing within the Gas Processing Area by the Joint Venturers and other occupants of the Gas Processing Area. (4) If the Joint Venturers or any other occupants of the Gas Processing Area are granted any easement under subclause (3), the State shall ensure that they locate their pipelines and other lines and services within such easement and implement arrangements for risk management and risk allocation so as to allow others to install lines within the easement associated with gas and other petroleum processing within the Gas Processing Area. (5) The Joint Venturers shall, where reasonably practicable, locate their construction and laydown areas within the 150 hectares reserved under subclause (2) or within cleared land and may seek the grant of short term leases under the LA Act over such areas in accordance with approved proposals. (6) The Joint Venturers shall also, where reasonably practicable and subject to implementation of reasonable arrangements for risk management and risk allocation, allow third parties to locate temporary construction and laydown areas on areas within the 150 hectares reserved under subclause (2). If the State reserves areas for or grants titles to third parties in respect of other parts of the Gas Processing Area or other cleared land, the State shall, without limiting subclause (5), ensure that the Joint Venturers have equivalent construction and laydown rights over such areas. (7) In respect of any area reserved pursuant to subclause (2) which is not the subject of an approved proposal or approved proposals at 31 December 2009, the State and the Joint Venturers shall consult with each other regarding the market situation and gas reserves in the Title Areas and the Greater Gorgon Area and the Joint Venturers' continued requirement for the area or any part thereof. Any portions of the area not reasonably required by the Joint Venturers at the discretion of the Joint Venturers, shall be released from the reservation. Any area not so released shall continue to be reserved under subclause (8) until 31 December 2014 or the sooner cessation of this Agreement. (8) In respect of any area continuing to be reserved pursuant to subclauses (2) and (7) which is not the subject of an approved proposal or approved proposals at 31 December 2014, the State and the Joint Venturers shall consult with each other regarding the market situation and gas reserves in the Title Areas and the Greater Gorgon Area and the Joint Venturers' continued requirement for the area. After such consultation the Minister at his discretion, may cancel the reservation or extend the whole or any part thereof that is then not the subject of an approved proposal for such period not exceeding 5 years as the Minister may determine. (9) If the date 31 December 2008 referred to in clause 7(1) is extended pursuant to clause 24 then the dates 31 December 2009 and 31 December 2014 in subclauses (2), (7) and (8) shall respectively be automatically extended for the same length of time. (10) If the Joint Venturers wish to use land within the Gas Processing Area beyond that which is reserved for them from time to time, they may request permission to bring forward a proposal under this Agreement in respect of that land and the Minister may in his discretion allow this. (11) The Minister shall advise the Joint Venturers of any land within the Gas Processing Area that the State is considering reserving or granting to a third party for the establishment and operation of plant for the treatment of natural gas and other petroleum, its processing, storage and/or shipment and associated ancillary structures and for incidental and ancillary purposes and, if requested by the Joint Venturers, the Minister shall consult with them in this regard. Joint Venturers to submit Proposals 7. (1) Subject to the provisions of this Agreement, the Joint Venturers shall, on or before 31 December 2008, or by such extended date as may be allowed pursuant to clause 24 or clause 30(3), submit to the Minister to the fullest extent reasonably practicable their detailed proposals (including plans where practicable and specifications where reasonably required by the Minister and any other details normally required by a local government in whose area any works are to be situated) with respect to the Project including, subject to and in accordance with clause 5, their proposals for the use and/or sharing of existing services, facilities or infrastructure on Barrow Island, which proposals shall include the location, area, provisions relating to management of quarantine risk, lay‑out, design (including design features to enable future delivery of gas to the mainland), quantities, materials and time program for the commencement and completion of construction or the provision (as the case may be) of each of the following matters, namely: (a) a pipeline or pipelines bringing untreated natural gas and other petroleum from the Title Areas to Barrow Island, including details of how the pipeline or pipelines will deliver or be expanded to deliver the untreated gas required for the establishment of a Domgas Project in accordance with clause 17; (b) pipelines to be situated on Barrow Island; (c) the treatment plant; (d) disposal of carbon dioxide (including by injection or sale); (e) shipping facilities and services; (f) quarantine management plan in respect of Barrow Island; (g) water supply; (h) power supply; (i) accommodation for construction and permanent workforce; (j) a social impact management plan including education, health and policing services and community facilities; (k) use of local professional services labour and materials and measures to be taken with respect to the engagement and training of employees by the Joint Venturers, their agents and contractors; (l) any leases, licences or easements required from the State; (m) airport and heliport facilities; (n) any other works, service or facilities desired by the Joint Venturers; (o) establishment and operation of the Barrow Island Coordination Council; and (p) closure plan including rehabilitation and long term management plan for injected carbon dioxide. Order of proposals (2) Each of the proposals pursuant to subclause (1) may, with the approval of the Minister or if so required by him, be submitted separately and in any order as to any matter or matters mentioned in subclause (1). Additional submissions (3) (a) Each time that the Joint Venturers submit a proposal or proposals under this clause they shall submit to the Minister in respect of that proposal or proposals details of any services (including any elements of the project investigations design and management) and any works materials plant equipment and supplies that they propose to consider obtaining from or having carried out or permitting to be obtained from or carried out outside Australia together with their reasons therefor and shall, if required by the Minister, consult with the Minister with respect thereto. (b) At the time when the Joint Venturers submit the complete detailed proposal or proposals required under this clause they shall confirm or address further the matters referred to in paragraph (a) and shall also submit to the Minister: (i) evidence to the reasonable satisfaction of the Minister as to the availability of finance necessary to carry out the Project; and (ii) evidence to the reasonable satisfaction of the Minister as to the readiness of the Joint Venturers in all other respects to carry out the Project. (4) If the complete detailed proposals submitted under this clause do not include a proposal to inject carbon dioxide recovered during gas processing, the Minister may notify the Joint Venturers within 60 days after submission of those proposals that he will not consider the proposals. On such notification the proposals shall lapse and clause 8(3) shall apply in relation to the submission of further proposals by the Joint Venturers. The Minister's decision under this subclause shall not be referable to arbitration under clause 30. (5) The provisions of clause 23 shall not apply to this clause. Consideration of proposals 8. (1) Subject to clause 7(4), in respect of each proposal pursuant to clause 7(1) the Minister shall: (a) approve the proposal without qualification or reservation; or (b) defer consideration of or decision upon the same until such time as the Joint Venturers submit a further proposal or proposals in respect of some other of the matters mentioned in clause 7(1) not covered by the said proposal; or (c) require, as a condition precedent to the giving of his approval to the said proposal, that the Joint Venturers make such alteration thereto or comply with such conditions in respect thereto as he thinks reasonable, and in such a case the Minister shall disclose his reasons for such alterations or conditions, PROVIDED ALWAYS that: (d) where implementation of any proposals hereunder have been approved pursuant to the EP Act subject to conditions or procedures, any approval or decision of the Minister under this clause shall, if the case so requires, incorporate a requirement that the Joint Venturers make such alterations to the proposals as may be necessary to make them accord with those conditions or procedures; and (e) subject to clause 8(1)(d), if the proposals include details of the conditions and restrictions that have been imposed on an approval to inject carbon dioxide under section 13 of the Ratifying Act, the Minister may not make any decision under clause 8(1)(b) or (c) which is inconsistent with those conditions and restrictions. Advice of Minister's decision (2) The Minister shall, within two months after receipt of proposals pursuant to clause 7(1) and compliance by the Joint Venturers with clause 7(3), give notice to the Joint Venturers of his decision in respect to the proposals PROVIDED THAT: (a) where a proposal is to be assessed under section 40(1)(b) of the EP Act the Minister shall give notice to the Joint Venturers of his decision in respect to the proposal within 2 months after the later happening of the receipt of the proposal and the service on him of an authority under section 45(7) of the EP Act; and (b) where a proposal will or may require the State to do any act which affects any native title rights and interests the Minister shall give notice to the Joint Venturers of his decision in respect to the proposal within 2 months of the later happening of the receipt of the proposal and the completion of all processes required by laws relating to native title to be undertaken by the State before that act may be done by the State. Consultation with Minister (3) If the decision of the Minister is as mentioned in clause 7(4) or in either of paragraphs (b) or (c) of subclause (1), the Minister shall afford the Joint Venturers full opportunity to consult with him and, should they so desire, to submit new or revised proposals either generally or in respect to some particular matter. Minister's decision subject to arbitration (4) If the decision of the Minister is as mentioned in either of paragraphs (b) or (c) of subclause (1) and the Joint Venturers consider that the decision is unreasonable, the Joint Venturers within 2 months after receipt of the notice mentioned in subclause (2), may elect to refer to arbitration in the manner hereinafter provided the question of the reasonableness of the decision PROVIDED THAT any requirement of the Minister pursuant to the proviso to subclause (1) shall not be referable to arbitration hereunder. Arbitration award (5) An award made on an arbitration pursuant to subclause (4) shall have force and effect as follows: (a) if by the award the dispute is decided against the Joint Venturers then, unless the Joint Venturers within 3 months after delivery of the award give notice to the Minister of their acceptance of the award, this Agreement shall on the expiration of that period of 3 months determine and neither the State nor the Joint Venturers shall have any claim against the other of them with respect to any matter or thing arising out of, done, performed or omitted to be done or performed under this Agreement; or (b) if by the award the dispute is decided in favour of the Joint Venturers, the decision shall take effect as (and be deemed to be) a notice by the Minister that he is so satisfied with and approves the matter or matters the subject of the arbitration. Effect of non‑approval of proposals ‑ termination (6) Notwithstanding that under this clause any proposals of the Joint Venturers under clause 7(1) are approved by the Minister or deemed to be approved as a consequence of an arbitration award, unless each and every such proposal and matter is so approved or deemed to be approved by 31 December 2009 or by such extended date or period if any as the Joint Venturers shall be granted pursuant to clause 24 or clause 30(3) then, notwithstanding anything to the contrary in this Agreement, this Agreement shall on that date cease and determine. Variation of proposals (7) Notwithstanding clause 22 the Minister may during the implementation of approved proposals approve variations to those proposals. Implementation of approved proposals 9. The Joint Venturers shall implement approved proposals in accordance with the terms thereof. Additional proposals 10. (1) Subject to clause 5, if the Joint Venturers at any time during the continuance of this Agreement desire to significantly modify, expand or otherwise vary their activities carried on pursuant to any approved proposals they shall give notice of such desire to the Minister and, within 2 months thereafter, shall submit to the Minister detailed proposals in respect of all matters covered by such notice and such of the other matters mentioned in clause 7(1) as the Minister may require. (2) The provisions of subclause (1) shall not apply to matters the subject of clause 17. (3) The provisions of clause 7 and clause 8 (other than clauses 8(5)(a) and (6)) shall mutatis mutandis apply to detailed proposals submitted pursuant to this clause, with the proviso that the Joint Venturers may withdraw such proposals at any time before approval thereof or, where any decision of the Minister in respect thereof is referred to arbitration, within 3 months after the award by notice to the Minister that it shall not be proceeding with the same. Net Conservation Benefits 11. (1) The Joint Venturers shall pay to the State $40 million, by instalments to be indexed in accordance with subclause (3) from 1 January 2004, for ongoing programs that will provide Net Conservation Benefits. (2) Each instalment under subclause (1) shall become due and payable, and shall be paid into a special purpose trust account, as follows: (a) by an initial instalment of $3 million within one month following the Commencement Date or upon establishment of the account in accordance with subclause (5), whichever is the later; and (b) thereafter by further instalments totalling $37 million (indexed in accordance with subclause (3)) commencing within one month of approval of complete detailed proposals submitted under clause 7 and continuing in accordance with a schedule of payments to be agreed between the Joint Venturers and the Minister, in consultation with the CALM Act Minister, prior to the approvals of those proposals. (3) Each instalment under subclause (1) shall be adjusted immediately prior to payment in accordance with the following formula (unless the adjustment would result in a reduction in the instalment) and the Joint Venturers shall become liable to pay the adjusted amount in accordance with this clause: Where: A = the adjusted amount of the instalment. B = the unadjusted amount of the instalment, as at 1 January 2004. C = the Consumer Price Index All Groups Perth last published by the Australian Bureau of Statistics before 1 January in the year of the adjustment. D = the Consumer Price Index All Groups Perth last published by the Australian Bureau of Statistics before 1 January 2004. (4) If either: (a) the Consumer Price Index All Groups Perth ceases to be published; or (b) the method of calculation of the Consumer Price Index All Groups Perth substantially alters, then the Consumer Price Index All Groups Perth is to be replaced by the nearest equivalent index and any necessary consequential amendments are to be made. That replacement index and those amendments are to be determined as follows: (c) by agreement between the Joint Venturers and the Minister; or (d) if they do not agree within 6 months, by the Australian Statistician or his nominee (acting as an expert and not as an arbitrator), whose decision is binding and conclusive. (5) The special purpose trust account under subclause (2) shall be established pursuant to section 69 of the CALM Act and shall be subject to arrangements for governance, consultation and reporting to be agreed between the Joint Venturers and the Minister, in consultation with the CALM Act Minister, as soon as practicable after the date of this Agreement. If section 69 of the CALM Act is repealed or substantially amended during the term of this Agreement, the Joint Venturers and the Minister shall promptly agree on an alternative equivalent special purpose trust account and any necessary alterations to the arrangements for governance, consultation and reporting. (6) No additional proposals shall be submitted under clause 10 for expansion of the Project beyond nameplate capacity of 10mtpa LNG production (or the equivalent gas input for other petroleum based product) until proportionate funding additional to the $40 million referred to above has been agreed between the Joint Venturers and the State. Establishment and expansion of a Domgas Project by the Joint Venturers shall not be subject to additional Net Conservation Benefits payments. DCLM costs 12. (1) The Joint Venturers shall, during the term of this Agreement after approval of complete detailed proposal