The Woodside Energy Group Ltd (ASX: WDS) share price dropped more than 3% following approval of the North West Shelf extension.
Woodside is one of the biggest oil and gas businesses in the Asia Pacific region. It wanted to extend the North West Shelf project – one of the largest liquified natural gas (LNG) projects in the world.
Government approval of North West Shelf extension
It was announced today by the Australian Minister for the Environment and Water, Senator Murray Watt, that he has given final approval for the North West Shelf Project Extension, subject to “strict conditions.”
Minister Watt said this decision was following the consideration of “rigorous scientific advice” and it was the last procedural step in a lengthy process after the announcement of proposed approval in May.
Watt noted that the decision-making scope for this proposal was narrow, relating to the risk of significant impacts on matters protected under federal environmental law. This is related to the World Heritage-listed Murujuga rock art, which forms part of Western Australia’s Dampier Archipelago.
Taking that into account, Watt imposed 48 strict conditions that will “avoid and mitigate significant impacts” to the Murujuga rock art. The additional conditions imposed are in addition to those already set by the Western Australian Government.
Watt said the conditions will “ensure that this project will be operated in a way that does not cause unacceptable impacts to the Murujuga rock art” including restricting air emissions which could have accelerated damage.
He said that the conditions will require a reduction in certain gas emissions below their current levels, in some cases by 60% by 2030 with ongoing reductions beyond that.
The project will be required to reduce its emissions every year and reach net zero greenhouse gas emissions by 2050.
The full conditions on Woodside
Watt outlined the conditions that Woodside is required to follow:
- Comply with strict limits on emissions of concern and in some cases continue reducing those emissions levels over the life of the plant.
- Comply with the conditions of the approval by the WA Government to prepare a new Air Quality Management Plan. This requires the proponent to comply with any new air quality objectives or standards that are derived from the Murujuga Rock Art Monitoring Program (MRAMP), ensuring they adhere to the most current science on the impacts to rock art.
- Put in place a robust continuous emissions monitoring system to demonstrate compliance with the strict limits on emissions levels.
- Regularly review and implement industry and Australian best practice emissions reductions technology.
- Manage direct, physical impacts to the rock through the implementation of a Cultural Heritage Management Plan.
- Demonstrate compliance with the conditions requiring emissions monitoring by publishing an annual compliance report including emissions data collected by the monitoring system.
Final thoughts on the Woodside share price
The conditions may be more onerous than some investors were expecting, but it may provide the protection that the rock art needs.
We’ll see how Woodside responds to this news, but it certainly puts more pressure on the company.
