Major Aussie LNG Plant Gets 40 More Years

Australia’s first and largest liquefied natural gas plant cleared the final hurdle to operate until 2070, after an almost seven-year process during which operator Woodside Energy Group Ltd. faced opposition from environmentalists and traditional owners concerned about the site’s pollution.

Environment Minister Murray Watt has allowed the North West Shelf project in Western Australia to keep operating for an additional 40 years, almost four months after he granted provisional approval. Woodside has agreed to 48 conditions to limit the site’s impact on local Aboriginal rock art.

“This is the last procedural step in a lengthy process,” Watt said in a statement. “I have imposed conditions that will require a reduction in certain gas emissions below their current levels, in some cases by 60 percent by 2030 with ongoing reductions beyond that,” he said, without specifying the gases.

Australia has had a rocky relationship with its LNG export industry since North West Shelf exported the nation’s first cargo of the superchilled gas in 1989. The nation’s 10 plants accounted for about a fifth of global exports last year – earning almost A$69 billion ($46 billion) from shipments focused on Japan, South Korea and China – but have been criticized for helping turn the nation into one of the biggest per-capita emitters while paying relatively little in royalties. 

North West Shelf is also one of the nation’s top polluters, and emissions through 2070 – including from the burning of its gas abroad – have been estimated to be about 10 times Australia’s current annual total. It has also faced criticism for its potential effect on a nearby ancient Aboriginal rock art site containing more than 1 million engravings – which Watt in July successfully lobbied to have designated as a United Nations Cultural World Heritage Site.   

The conditions require additional monitoring and management of air emissions to protect the Dampier Archipelago, Woodside said in a statement.

“This final approval provides certainty for the ongoing operation of the North West Shelf Project, so it can continue to provide reliable energy supplies as it has for more than 40 years,” Woodside Chief Operating Officer Liz Westcott said.

The Labor government was resoundingly reelected in May on a platform that was focused on addressing climate change and is seeking to host next year’s UN climate summit. It has argued that gas is vital to back up renewable generation domestically and abroad, and replace dirtier coal-fired generation.

Some of its Pacific neighbors disagree. Earlier this week, Vanuatu Climate Change Minister Ralph Regenvanu said approving the extension of North West Shelf could breach an International Court of Justice ruling in July that found countries are legally obliged to tackle climate change or risk liability for compensation.

Having secured the approval for North West Shelf to run for many more decades, Woodside will be looking to clear Browse – another contentious project to send gas from massive offshore reserves to the liquefied natural gas plant. 

Woodside last year agreed to an asset swap with Chevron Corp. that would give the Australian company a 50 percent stake in North West Shelf. Units linked to BP Plc, Cnooc Ltd., Mitsubishi Corp. and Mitsui & Co. are also shareholders. Shell Plc is exploring the sale of its 16.67 percent interest, which could be worth more than $3 billion. 

North West Shelf will also be required to reach net zero greenhouse gas emissions by 2050 under Australia’s Safeguard Mechanism.