Article by Tom Rabe and Angela Macdonald-Smith, courtesy of the Australian Financial Review.
10.09.2025
The Albanese government’s strict new limits on nitrogen oxide emissions to protect ancient Indigenous rock art have been the major sticking point in the final approval of Woodside’s multi-billion dollar North West Shelf gas project in remote Western Australia.
Almost four months after Environment Minister Murray Watt gave a provisional green light to extend the North West Shelf facility’s operation until 2070, Woodside and the government are yet to agree on conditions that underpin the final approval.
The gas project has been linked to WA’s medium-term energy security and downstream processing ambitions, while the years-long approval process to extend the facility’s life has become a key example of Australia’s convoluted environmental approval system.
Industry and government sources, speaking on the condition of anonymity due to the sensitivity of discussions, told The Australian Financial Review the federal government’s demands for a reduction of nitrogen oxide emissions have been central to the negotiations.
However, both industry and government sources said on Tuesday that progress has been made in recent days.
The government’s new conditions on nitrogen oxide emissions are aimed directly at protecting Indigenous rock art at Murujuga on the Burrup peninsula that secured World Heritage recognition in July and is near the project site.
Nitrogen oxides are gasses emitted during the production of liquified natural gas, which takes place at Woodside’s Karratha Gas Plant. When mixed with water, oxygen and other chemicals in the atmosphere they can form nitric acid and fall as acid rain. Scientific studies suggest increased acidity can damage the surface layer of rocks bearing traditional paintings, but the impact of industrial emissions from Karratha on the Murujuga rock art has not been conclusive.
Woodside was provided with a minimum 10-day period to respond to the government’s conditions of approval in late May. Nearly 15 weeks later, Watt on Tuesday conceded the negotiations with Woodside had taken longer than expected.
“That has taken a bit more time than I would have liked, but as I say, it’s a complex project, but I would expect that we’d be finalising that pretty soon,” Watt told reporters during a renewable energy conference in Brisbane.
“What we have been doing ever since is having my department work with Woodside to ensure that the conditions that we put in place will protect that rock art but also are workable from an operational point of view.”
The North West Shelf facility near Karratha, more than 1200 kilometres north of Perth, has been a key hub for industry since the 1970s. The peninsula is also home to the largest and most diverse collections of ancient rock art in the world.
The Murujuga Aboriginal Corporation supports the extension of the facility, but other Indigenous leaders oppose it because of concerns about the impact of emissions on the rock art.
The WA Labor government granted state approval for the North West Shelf extension last year, setting conditions including that the facility could not exceed 8900 tonnes per year of nitrogen oxide emissions and that emissions must reduce to 3065 tonnes per year by 2030.
The levels of nitrogen oxide emissions contained in the federal government’s conditions have not been made public. But Woodside chief executive Meg O’Neill last month expressed frustration at the government’s conditions, which she suggested were not based in science and were not technically feasible. She declined to go into detail.
The extension of the North West Shelf facility is essential to Woodside’s proposed $30 billion development of the Browse gas fields more than 900 kilometres to the north.
The federal government is also expected to make a call on the heritage value of the local area later this week after the Federal Court found it had unnecessarily delayed the decision. That decision could have ramifications for future industry on the Burrup Peninsula.
The latest developments come after longstanding North West Shelf joint venture partner Shell kicked off a process for the sale of its 16.67 per cent stake in a step that – if completed – would represent another major shake-up of the venture only months after Woodside agreed to take over fellow partner Chevron’s stake.
Shell’s move is understood not to be related to the ongoing process to extend the life of the North West Shelf venture by 40 years to 2070.
But its exit would align the ownership interests in the North West Shelf venture more closely with that of the undeveloped Browse gas project, targeted as the next major source of gas for the Karratha gas plant.
Sources close to the London-based energy major said the decision to market the stake comes after Shell received an approach for the asset from a third party.