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- Investors in Woodside Petroleum (WPL) are being warned that approvals for its Scarborough LNG project are “in a mess” just weeks before an investment deadline
- The report, released by Conservation Council of WA (CCWA), says that almost every environmental and heritage approval for the $16 billion project remains outstanding
- A Woodside spokesperson rejects the proposition that there are any significant environmental approvals risk of proceeding at this time
- The CCWA has challenged a decision by the WA Environmental Protection Authority to allow the Pluto LNG plant to receive gas from anywhere, including Scarborough
Woodside Petroleum (WPL) investors have been warned in a report that the oil and gas giant’s Scarborough LNG project is “in a mess” just weeks before an investment deadline.
The report, part of a campaign against the project, was released by the not-for-profit Conservation Council of WA (CCWA), who claimed that there are issues with the project’s environmental and heritage approvals, creating major risks and uncertainty for the project.
This comes less than two months before Woodside expects to make a final investment decision (FID) for its LNG project.
CCWA said that almost every environmental and heritage approval for the $16 billion project remains outstanding due to unresolved legal challenges, requires updating or is behind in schedule, while a new area of legal and repetitional risk emerging around Aboriginal heritage.
According to the report, Woodside’s market disclosure has been vague and does not provide the level of detail needed for investors to properly assess the risk. The company rejects the assertion.
A spokesperson for Woodside confirmed that all the primary environmental approvals from the Commonwealth and WA government are in place to support a FID, as disclosed in its Q3 report.
“Securing primary environmental approvals ahead of an FID helps to mitigate the risk of whether or not the project is acceptable, therefore we reject the assertion there is significant environmental approvals risk of proceeding to an FID at this time,” the spokesperson told The Market Herald.
“Woodside continues to progress secondary environmental and heritage approvals in consultation with relevant stakeholders and government departments as per the development schedule before the commencement of relevant activities.”
The proposed Scarborough and Pluto LNG project is in sensitive marine environments, and in an area of globally significant Aboriginal heritage proposed for World Heritage Listing.
Woodside and partner BHP are planning to commit to the project by December 15.
CCWA Policy and Legal Director Piers Verstegen said with only a matter of weeks until Woodside is due to commit to the development, the report shows environmental and heritage approvals are “unresolved and uncertain”.
“Overall, approvals for this project are in a mess, and are nowhere near the point where investors can responsibly commit capital,” he suggested.
“The Scarborough and Pluto LNG project is a highly complex undertaking. If it proceeds, it will be one of Australia’s most polluting fossil fuel projects in one of the world’s most sensitive environments, with globally significant Aboriginal cultural heritage values.
“Approvals are required from at least five different regulatory authorities and so far, Woodside has failed to significantly de-risk any of these approvals.”
The CCWA has challenged the WA Environmental Protection Authority’s decision to enable the Pluto LNG project to take gas from anywhere in the state, including Scarborough. The case will be heard by the WA Supreme Court on December 20.
The Woodside spokesperson said the proposed development has been assessed by the Western Australian Environmental Protection Authority (EPA), the Australian Department of Agriculture, Water and the Environment (DAWE) and the Australian National Offshore Petroleum Safety and Environmental Management Authority (NOPSEMA).
“These environmental assessment processes concluded the proposal may be implemented, subject to conditions and activity specific Environment Plans,” they said.
A Woodside spokesperson told WAtoday that the company is not able to comment on the possible outcome of the court case.
“At all times Woodside has complied with regulatory requirements and environmental processes in seeking and receiving approvals,” they said.
According to the spokesperson, the firm is confident that unfavourable regulatory rulings would not influence the cost or timeline of the Scarborough and Pluto expansions.
On the ASX today, Woodside was down 1.16 per cent at $22.98 at market close.
