Scarborough Energy Project faces additional obstacle from Australian doctors group

Doctors group is taking environment regulator to Federal Court claiming approval unlawfully ignored environmental impact of greenhouse gas emissions.

WHAT: Woodside’s Scarborough Energy Project must clear another legal hurdle after DEA initiated legal proceedings in the Federal Court attempting to overturn the environmental regulator’s final approval.

WHY: DEA contends that the project’s approval was unlawful, raising concerns about the project’s greenhouse gas emission and accusing the country’s environmental regulator of engaging in a “box ticking exercise”.

WHAT NEXT: The Federal Court will now review the regulator’s final approval for the project. Woodside had been seeking to begin LNG exports in the second half of 2026, with 82% of construction work completed already.

Australian oil and gas giant Woodside Energy will need to clear another hurdle for its Scarborough Energy Project to get the greenlight after Doctors for the Environment Australia (DEA) initiated legal action in the country’s Federal Court on May 2.

The project involves the development of the Scarborough Gas Field and piping of its natural gas to the Pluto LNG terminal. It had received the all-clear from Australia’s National Offshore Petroleum Safety and Environmental Management Authority (NOPSEMA) in February, following consultation which began in August 2023 and lasted for 18 months.

However, the project now faces one last obstacle after DEA filed a legal action in the country’s Federal Court against NOPSEMA's decision to give environmental approval to the $16.5bn megaproject.

In its filing, DEA accused NOPSEMA of carrying out a “box ticking exercise” in its approval of the project, adding it was concerned about the resultant greenhouse gas emissions that would be generated by the huge project in Western Australia.

In requesting a judicial review, DEA executive director Dr. Kate Wylie claimed that NOPSEMA’s decision to greenlight the project may have been unlawful, arguing that the approval of the environmental plan may have been granted without fully comprehending how the impacts of the project would be managed.

Dr. Wylie also criticised the assertion that offshore gas from the project will displace more carbon-intensive energy sources in Asia, such as coal, highlighting Woodside’s acknowledgement in April of the challenge in making the coal-to-gas switching argument.

The challenge by DEA marks the latest attempt by an environmental group to halt the project. In June 2022, the Australian Conservation Foundation (ACF) submitted legal action to Australia’s Federal Court seeking to block construction of the project until its potential impact on the Great Barrier Reef was assessed.

However, in August 2024, the ACF withdrew its legal case after concluding that it was “unlikely to succeed”.

Located in the Carnarvon Basin, the Scarborough gas field is about 375 km offshore from the coast of Western Australia. Eight wells will be drilled initially, with an additional five more wells expected to be drilled throughout the lifespan of the gas field.

A 430-km pipeline connects a semi-submersible floating production unit with the Pluto LNG onshore plant. The existing Pluto Train 1 boasts a production capacity of 3mn tonne per year (tpy) of LNG; however, modifications are still needed to enable the liquefaction unit to process natural gas from the Scarborough field.

Pluto Train 2, upon completion, will be capable of processing up to 5mn tpy of the super-chilled fuel. Train 2 will feature 51 modules shipped from Indonesia. Already 82% of construction work on the mega-project has been completed.

While the Scarborough Energy Project has come under criticism from environmental groups, Woodside Energy contends that the project will be one of the lowest carbon intensity sources of LNG to be exported to north Asian markets.

The energy giant cites the design efficiencies the floating production unit and onshore liquefaction trains will boast, as well as that the Scarborough reservoir contains less than 0.1% carbon dioxide.

Woodside took a positive final investment decision (FID) on the project in November 2021. However, the project has been hit with both delays and rising costs. At the time of FID, the project was forecast to come at a price tag of $12bn. However, the project’s cost has now risen by 4% to about $12.5bn.

Woodside hopes to begin exporting gas from the project in the second half of 2026. The project is a key component of the Australian oil and gas giant’s push to become a global LNG powerhouse.

Woodside owns a 74.9% stake in the Scarborough gas field, while LNG Japan holds a 10% interest and JERA possesses a 15.1% stake in the Scarborough joint venture. The Australian firm also owns majority stakes of Pluto Trains 1 and 2. MidOcean Energy and Kansai Electric each hold 5% interests in Pluto Train 1, while Global Infrastructure Partners has a 49% stake in Train 2.

In April, Woodside announced a positive FID on the first phase of the Louisiana LNG project. Located in Calcasieu Parish on the US Gulf Coast, the initial phase of the facility will boast a production capacity of 16.5mn tpy and is expected to come online in 2029. Expansion of the facility to include two more liquefaction trains would increase capacity to 27.6mn tpy.

Woodside expects to be capable of exporting 24mn tpy from its global LNG portfolio in the 2030s and hold a grip on more than 5% of global LNG supply.