Woodside Energy Group Ltd’s (WDS) shares are experiencing a premarket surge on Monday following a significant development in the legal battle surrounding its Scarborough Energy Project. The Australian Conservation Foundation (ACF), a prominent environmental group, has decided to drop its challenge to the project’s environmental approval.
The ACF, represented by the Environmental Defenders Office, initiated legal proceedings in the Federal Court of Australia in June 2022, aiming to halt the offshore activities of the Scarborough project. However, both parties have now reached an agreement to dismiss the case. This agreement removes a major hurdle for Woodside, allowing the project to move forward as planned.
The Scarborough Energy Project, encompassing the Scarborough Joint Venture and Pluto Train expansions, is a large-scale initiative aimed at producing liquefied natural gas (LNG). As of June 2024, the project is reported to be 67% complete, with the commencement of LNG production scheduled for 2026.
Woodside CEO Meg O’Neill highlighted the project’s environmental credentials, stating that the Scarborough reservoir contains less than 0.1% carbon dioxide and that the project’s design will result in one of the lowest carbon intensity sources of LNG delivered to North Asian markets. O’Neill also emphasized the project’s contribution to energy security in Western Australia and its role in providing energy to Asian economies as they transition towards a lower-carbon future.
The ACF, in a statement reported by Reuters, acknowledged that its legal challenge was unlikely to succeed. The group cited the limitations of Australia’s environmental laws, which they say favor fossil fuel interests and lack explicit requirements for considering climate damage. However, the ACF remains committed to advocating for stronger environmental regulations and policies.
Despite the legal setback, Woodside continues to advance its energy portfolio. Earlier this month, the company announced a deal to acquire 100% of OCI Global’s equity interests in the Clean Ammonia project under construction in Beaumont, Texas, for $2.35 billion. This acquisition signals Woodside’s ambition to diversify its energy portfolio beyond traditional fossil fuels and explore alternative energy sources such as clean ammonia.
The development surrounding the Scarborough Energy Project has significant implications for Woodside’s future prospects and for the broader energy landscape in Australia. The project’s progress will be closely watched, particularly as the world grapples with energy security and climate change challenges.
