Environmental approval has been granted for a new gas project in Queensland.

The Mahalo Gas Project (MGP) has been given the green light under the Commonwealth Government Environment Protection and Biodiversity Conservation Act.

The company behind the project, Comet Ridge, has welcomed the first of two environmental steps required for the Bowen Basin project to move towards production.

The second step is under assessment by the Queensland Government Department of Environment and Science.

The MGP project is a joint venture between Comet Ridge (40 per cent), Santos (30 per cent) and APLNG (30 per cent).

Comet currently owns and runs Mahalo North, which is north of the MGP area.

Comet Ridge MD Tor McCaul noted that the approval came at a time when the federal government was focusing on natural gas as a means to support the east coast power markets.