Local ecosystems and a major fish nursery will benefit as a result of an agreement struck on the building of a new pipeline to Magnetic Island.

In an attempt to minimise environmental impact, NQ Water offered to negotiate compensation for any temporary loss of habitat incurred as a result of building the new pipeline.

The agreement worked out with the Department of Primary Industries and Fisheries allocates $35,000 to the investigation and declaration of the proposed Cleveland Bay Fish Habitat Area.

Another $30,000 goes to projects associated with the Creek to Coral program that result in better quality water in the Townsville Thuringowa Coastal Dry Tropics region.

Chairman Ian Hamilton says it is part of NQ Water’s ‘net environmental gain’ policy.

"The pipe will be shallow laid along the route of the existing pipeline so there will be no new impact on previously undisturbed areas," says Mr Hamilton.

"It is designed so impact on mangroves at Bolger’s Bay on the Magnetic Island side and the beach at Pallarenda is also minimised."

Mr Hamilton says there is around one percent coral cover across the Magnetic Island reef flat and areas of seagrass regrowth that have been taken into account.

He says NQ Water is securing permits from all regulatory agencies and contractors are ready to proceed with the replacement of 5.6 kms of 400 mm pipeline which is 20 years old.

They include the Great Barrier Reef Marine Park Authority, the Department of Primary Industries and Fisheries, the Department of Natural Resources, Mines and Energy, Queensland Parks and Wildlife Service, the Environment Protection Agency, and the Townsville Harbour Master.