Foreign Minister Marise Payne on Tuesday night said"the Australian government takes seriously the potential risks to Australian interests arising from a possible major fisheries industrial development on the PNG side of the Torres Strait".
Senator Payne said the Australian high commission had raised the government's concerns with the Papua New Guinean Minister for Fisheries and Marine Resources.
"Any development on the scale envisaged in an MOU between PNG authorities and a Chinese company raises concerns as it could impact on Australian fisheries,environment and traditional inhabitants of the Torres Strait,"she said.
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"The PNG Government has assured us that the MOU is non-binding and that any final decisions are some way off. Decisions have not been made on fish stocks or areas to be fished."
Daru,one of the few Torres Strait islands that do not belong to Australia,is just a few kilometres from Australia's maritime border and less than 200km from the Australian mainland.
Australian fishers are worried the project will deplete fish stock in the Torres Strait,while security experts have raised concerns the facility could be used for military purposes.