Australia gives North West Shelf gas plant final approval to run until 2070

By Christine Chen

SYDNEY, Sept 12 (Reuters) - Australia gave final approval on Friday for Woodside WDS.AX to operate the country's oldest and second-largest liquefied natural gas plant until 2070, while imposing 48 "strict" new rules in a bid to limit its environmental impact.

The decision to extend the life of the North West Shelf plant in Western Australia caps a seven-year approvals process dogged by appeals and backlash from green groups, who say it will imperil nearby ancient rock art and set back efforts to curb climate change.

The federal and state governments had to balance those concerns with the interests of one of Australia's largest export industries, which is the biggest source of LNG for key ally Japan.

Environment Minister Murray Watt said on Friday Woodside had agreed to 48 conditions that were "technically feasible" but would protect the Indigenous Murujuga rock art in the area by limiting emissions.

"Some of the gases that are emitted at this facility, which if not controlled properly, could have a significant impact on the rock art," he told reporters.

"We are confident that the conditions that we’ve set are the right ones to protect the jobs in and the economic opportunities arising from the plant but also importantly to protect the rock art."

The rock art is estimated to be up to 50,000 years old and is of cultural and spiritual significance to Indigenous Australians. It was inscribed on the UNESCO World Heritage List in July.

Watt also set additional legal protections for parts of the site under federal heritage law, while ensuring "this decision does not stop industry from operating".

The North West Shelf plant's existing licence had been set to expire in 2030.

The four-decade extension was given preliminary approval in May, but Woodside then battled with the government over the conditions for nearly four months.

Watt said Woodside had agreed to specific limits on pollutants, including cutting levels of nitrogen oxide emissions by 60% in five years and 90% by 2061.

Rock art experts have said such emissions risk degrading the petroglyphs by turning into acid rain.

"This final approval provides certainty for the ongoing operation of the North West Shelf Project, so it can continue to provide reliable energy supplies as it has for more than 40 years," said Liz Westcott, Woodside's chief operating officer for Australia.

The company was committed to protecting the rock art, she said.

'CARBON BOMB'

Critics condemned the decision as a blow to Australia's efforts to curb climate change, with the plant and its LNG expected to generate up to 4.3 billion metric tons of carbon emissions over its lifetime.

"It is a betrayal of Australians who voted for action on climate change, and of our Pacific neighbours," said Mark Ogge, principal advisor at The Australia Institute.

The Australian Conservation Foundation said the conditions were inadequate in preventing “climate damage” caused by the plant, calling it a "carbon bomb".

The North West Shelf LNG plant was Australia's largest until July, when Woodside shut one of its five processing trains, reducing its capacity to 14.3 million metric tons a year as the offshore gas fields that long fed the plant are drying up.

The extension lays the groundwork for Woodside to bring online new supply, including its Browse offshore project, the country's biggest untapped conventional gas resource.

Woodside's partners in the North West Shelf venture are units of BP BP.L, Chevron CVX.N, Shell SHEL.L, Japan's Mitsui & Co 8031.T and Mitsubishi Corp 8058.T, and China's CNOOC 600938.SS.

Woodside shares closed down 3.4% with oil prices falling.