The ACCC said it proposed to grant authorisation to a joint marketing arrangement for the Otway project.
Woodside has a 51.55% stake and is the operator of the offshore Victorian project. Origin Energy has 29.75% equity, Benaris Internationl N.V. has 12.7% and CalEnergy Gas holds the remaining 6%.
Origin will separately market its share of the LPG while the other partners can jointly market their gas for three years.
"The applicants advise that in the absence of authorisation, it is quite possible that Benaris and CalEnergy would sell their LPG entitlements to Woodside or Origin," the commission said in its ruling.
"Given this, and the higher cost of marketing small volumes of LPG, the ACCC considers that, in the absence of authorisation, Benaris and CalEnergy are likely to sell their entitlements to Woodside or Origin.
"Also, given the separate marketing of the remaining significant participant in the Otway Project, Origin, and the small volumes of LPG produced by Benaris and CalEnergy, the ACCC considers that little, if any, anti-competitive detriment is likely to result from the applicants' joint marketing arrangement proposal.
"In any event, the separate marketing of Origin's LPG and the competitive constraint provided by LPG producers from other gas fields and refineries would limit any anti-competitive detriment generated by the proposed arrangement.
"The ACCC is satisfied that any detriment will be outweighed by benefit in the form of cost savings to Benaris and CalEnergy".
Construction is already well underway at the onshore gas treatment plant and the project is on schedule to produce first gas in mid-2006.
Production is expected to be 60 petajoules of gas a year along with 100,000tpa of LPG and 800,000 barrels a year of condensate. Production from three wells planned for the nearby Geographe field will be added in a few years’ time.