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Woodside's controversial Scarborough LNG project gets final approval amid climate warnings

Woodside's existing Pluto processing plant will be expanded so it can receive gas from Scarborough. ((Supplied: Woodside))

Woodside has ticked all the major regulatory boxes for its $16.5 billion Scarborough liquefied natural gas project, meaning work on Australia's biggest oil and gas project in a decade can kick into top gear.

A spokeswoman for the Perth-based company said the WA government's approval of a pipeline licence was the last primary state and commonwealth approval required for Scarborough.

But while the project has cleared its domestic regulatory hurdles, it has some global issues to contend with.

Earlier this week, the Intergovernmental Panel on Climate Change (IPCC) released a new report which said the world needed to dramatically cut emissions from fossil fuel infrastructure to avoid the catastrophic effects of global warming

It followed a report by International Energy Agency (IEA) last year, which called for no more investment in new oil, gas and coal projects if net zero emissions were to be achieved by 2050.

The Scarborough project involves piping gas from the Scarborough gas fields, about 375 kilometres off the coast of WA, to an expanded Pluto processing facility near Karratha.

It is expected to emit millions of tonnes of carbon over its lifetime.

But the IPCC report's modelling showed that gas usage would need to be reduced by 15 per cent on 2019 levels to limit global warming to 2 degrees above pre-industrial levels by 2050.

The report prompted a strong response from UN secretary-general Antonio Guterres, who called investment in new fossil fuel infrastructure "moral and economic madness".

'Completely the wrong direction': climate scientist

Climate scientist Bill Hare, who was the lead author on a previous IPCC report, said the report showed that there was no room globally for a new gas project like Scarborough.

"Adding more gas to the system via Scarborough and other projects is actually going backwards because it's actually increasing emissions, not decreasing emissions," he said.

"In other words, it's making the situation worse, it's causing longer term lock-in of carbon intensive energy, it's really completely the wrong direction."

Woodside has recently announced it wants to achieve zero net emissions by 2050. (ABC News: Keane Bourke)

In a climate plan released last month, Woodside commited to net zero emissions by 2050 and a 30 per cent reduction by 2030.

It said it would spend $5 billion on low-carbon projects that included current solar energy projects and investigating carbon capture and storage.

Wood Mackenzie LNG analyst Daniel Toleman said high-level reports like that by the IEA were affecting investment and made it more challenging for companies to develop these projects.

But he said he believed the demand for LNG would grow, particularly in South-East Asia and South Asia, and it would be needed as a backup for renewable energy sources.

"We still see LNG growing throughout both the 2020s, 2030s and well into the 2040s," he said.

Ukraine war disrupts supply

The invasion of Ukraine has also disrupted LNG projects in Russia, affecting investment and supply.

Mr Toleman said some LNG projects under construction in Russia had been delayed, including the Baltic LNG project by the Russian state-owned company Gazprom.

Other projects at an earlier stage of development were also now in jeopardy.

"They now look unlikely with western companies pulling out, they're not going to finance those projects and so they need to be replaced by others," he said.

"But it does take quite a long time for LNG projects to move forward so ones that are already going forward are advantaged."

Woodside aims to send its first shipload of liquefied natural gas processed through Pluto Train 2 to north Asian customers in 2026.

By this time, Mr Toleman said Scarborough was expected to produce about 9 million tonnes of LNG a year.

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