Finance Finance News Woodside, BHP approve mega Scarborough gas project off WA
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Woodside, BHP approve mega Scarborough gas project off WA

Woodside has completed a previously flagged merger with BHP's oil and gas portfolio. Photo: AAP
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Woodside and BHP have signed off on their vast and controversial Scarborough gas project off the West Australian coast, but environmentalists have vowed to continue fighting the proposal.

In a statement to the ASX on Monday, Woodside confirmed it had completed a previously flagged merger with BHP’s oil and gas portfolio.

The companies have made a final investment decision approving the $16 billion Scarborough LNG project.

Woodside is proposing to develop the Scarborough gas field through offshore facilities connected by a 430-kilometre pipeline to its Pluto LNG onshore plant.

The Pluto facility will be expanded as part of the development, which Woodside chief executive Meg O’Neill said would set the company on a “transformative path”.

A report by the Conservation Council of WA and The Australia Institute earlier this year warned Scarborough would produce an additional 1.6 billion tonnes of emissions, “equivalent to building 15 new coal power stations”.

It said the project was the highest-polluting fossil fuel development proposed in Australia and would increase WA’s total emissions by almost five per cent, or 4.4 million tonnes per year.

There are also concerns about the impact the project will have on heritage-listed Murujuga rock art on the Burrup Peninsula.

CCWA executive director Maggie Wood on Monday said a co-ordinated national campaign would continue to apply pressure to the project and its investors.

“This is far from over,” she said.

“At a time when the world is facing up to the dire need to reduce emissions and prevent irreversible damage to our climate, this project is an insult to ordinary Australians who will bear the brunt of future extreme weather events and climate disasters caused by developments like Scarborough.”

The Australasian Centre for Corporate Responsibility said Woodside had “declared war on the climate” and the project posed an unacceptable level of risk to shareholders.

“Woodside is aggressively pursuing expansion while major trading partners such as Japan and Korea are taking active steps to decrease LNG demand, effectively ignoring the risk of stranded assets,” director of climate Dan Gocher said.

“Shareholders should demand Woodside abandon its expansion plans.”

Woodside is aiming to achieve net-zero direct emissions by 2050 or sooner and has set targets of 15 per cent reduction by 2025 and 30 per cent by 2030.

It insists Scarborough has been subject to extensive review and will deliver one of the lowest-carbon LNG sources in Australia.

Ms O’Neill said it would significantly contribute to Woodside’s cash flows and shareholder returns.

“Developing Scarborough delivers value for Woodside shareholders and significant long-term benefits locally and nationally, including thousands of jobs, taxation revenue and the supply of gas to export and domestic markets for decades to come,” she said.

Premier Mark McGowan welcomed the news, saying the project would create more than 3200 local jobs.

The newly expanded Woodside, led by Ms O’Neill, will be owned 52 per cent by existing Woodside shareholders and 48 per cent by existing BHP investors, with assets spanning from Australia to the Gulf of Mexico and the Caribbean.

BHP chief executive Mike Henry said the merger would provide value for the resources giant’s shareholders.

“Scarborough will provide a reliable source of LNG for global customers and secure gas supply for the domestic market, as well as ongoing employment in Western Australia,” he said.

Greenpeace said the project posed a “direct threat to some of Australia’s most extraordinary marine life”.

-AAP