$12.5 billion gas project out of legal woods as court ruling ends up in Woodside’s favor

Australia’s energy giant Woodside has welcomed the Federal Court’s decision to validate the go-ahead for an environmental plan related to its giant gas project off the coast of Western Australia.

The court’s decision serves to confirm the validity of the National Offshore Petroleum Safety and Environmental Management Authority’s acceptance of the Scarborough offshore facility and trunkline environment plan, which was the final Commonwealth environmental approval required for Woodside to connect, commission, and operate the Scarborough floating production unit (FPU).

Meg O’Neill, Woodside’s CEO, highlighted: “This outcome reinforces confidence in progressing the Scarborough energy project, which is generating thousands of jobs during the construction phase and creating significant supply chain opportunities. The project is expected to contribute more than A$50 billion in direct and indirect taxes to Australia’s economy.

“Scarborough is expected to be one of the lowest carbon intensity sources of LNG delivered into north Asian markets, providing reliable energy to the region while also supporting local energy security through critical domestic gas supply.”

This project, which comprises the Scarborough gas field, the construction of Pluto Train 2, modifications to the existing Pluto Train 1, and the integrated remote operations center, is set to produce up to 8 million tonnes of LNG per year and contribute up to 225 terajoules per day of domestic gas supply into the Western Australian market.

The Scarborough energy project was 86% complete as of June 30, 2025, excluding Pluto Train 1 modifications, and is targeting first LNG cargo in the second half of 2026. Woodside is the operator of the project and has a 74.9% participating interest in the Scarborough field. LNG Japan holds a 10% and JERA, which came onboard in October 2024, has a 15.1% interest in the Scarborough joint venture (JV).

After the total project cost estimate increased to $12.5 billion, representing $8.2 billion as the Australian player’s share for the integrated energy project, this is a 4% jump from the previous cost estimate of $12 billion when a final investment decision (FID) was disclosed in November 2021.

After the court ruled that the Scarborough gas project approval is valid, Doctors for the Environment Australia (DEA), which challenged the approval in court, said the project would impact community health and environment, arguing that the national offshore gas regulator, acted unlawfully in approving Woodside’s environment plan without fully understanding how the project’s impacts would be managed.

DEA underlines that Woodside’s data indicates that the project would result in the release of climate pollution equivalent to an estimated 878 million tonnes of carbon dioxide, perceived to be about double Australia’s annual greenhouse gas (GHG) emissions from all sources.

Kate Wylie, DEA’s Executive Director, emphasized: “After today’s decision, it is clear that Australia’s offshore gas regulations are not living up to the broader public interest. Everybody needs a safe climate for their health and wellbeing, so we all have an interest in the effective regulation of industries that are making our climate more dangerous.

“The offshore gas industry in Australia is one of the most significant sources of greenhouse gas emissions, so the Australian community should be able to expect the government to regulate those impacts seriously. NOPSEMA’s decision to approve this environment plan appears to fly in the face of that commonsense expectation.”

The Environmental Defenders Office (EDO) has underscored that the Federal Court has dismissed the application against the approval, which means the project can proceed.

The court ruling comes after Woodside secured environmental approval for the North West Shelf (NWS) project extension from the Western Australian government, restarting the federal environmental approvals process.

This is perceived to be the key to advancing the firm’s $30 billion Browse gas project and extend the Karratha gas plant’s life to 2070.

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