His comments came as he welcomed the opening of the world’s largest ammonia plant on the peninsula.

Woodside Petroleum also announced this week it had chosen the Burrup Peninsula as the future home of its Pluto liquefied natural gas plant.

Pluto director Lucio Della Martin said the decision was based on environmental factors, available local infrastructure and access to deep water. Site works are scheduled to begin in the last quarter of this year.

Woodside discovered the Pluto field, 190km north-west of Karratha, a year ago and recently announced it was fast-tracking development to take advantage of rising LNG demand.

A final investment decision on the project is expected by mid-2007, with first production forecast from late 2010.

Meanwhile, an Indian-owned company, Burrup Fertilisers, this week opened an $800 million ammonia plant on the peninsula. The plant is expected to produce up to 760,000 tonnes of liquid ammonia per year through the company’s 25-year, take-or-pay contract to purchase natural gas from the North West Shelf.

The project, believed to be the largest Indian investment in Australia, will provide ammonia to create fertilisers for Indian agriculture, with the first shipment scheduled for mid-May.

Carpenter said the completion of the plant vindicated the government’s decision to invest in infrastructure in the region, but he warned that high oil and gas prices could deter future downstream investment.