Anglo-Australian miner BHP and Australian petroleum firm Woodside have announced their collaboration on a liquified natural gas (LNG) project valued at around $12bn. The project, dubbed Pluto Train 2, is to take place in the state of Western Australia at the Scarborough gas field, with an anticipated first cargo of 2026.

While the project was initially conceived last year, plummeting oil and gas prices as a result of the pandemic delayed final investment decision on the scheme.

The announcement comes on the same day that the two companies signed a merger creating a global energy company, combining BHP’s oil and gas arm with Woodside. The parties have said that this collaboration will create one of the top 10 independent oil and gas producers in the world.

In a statement, Woodside CEO Meg O’Neill said getting development approval for Pluto was a “landmark achievement”.

“Developing Scarborough delivers value for Woodside shareholders and significant long-term benefits locally and nationally, including thousands of jobs, taxation revenue, and the supply of gas to export and domestic markets for decades to come,” she said. “The Scarborough reservoir contains only around 0.1% carbon dioxide, and Scarborough gas processed through the efficient and expanded Pluto LNG facility supports the decarbonisation goals of our customers in Asia.

“This capital efficient development leverages Woodside’s existing infrastructure and our proven expertise in project execution. The contracting model, development concept, and execution strategy have been designed to reduce cost risk and protect shareholder value.”

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By GlobalData

According to Woodside, the latest agreement will see up to eight million tonnes of LNG passing through Pluto each year, as well as up to 225 terajoules per day of domestic gas. The group has also said that the gas will be one of the lowest carbon-intensive sources of LNG delivered to north Asia.

Despite this promise of a low-carbon footprint, the project has been met with resistance from green groups, with lawyers for the Conservation Council of Western Australia submitting requests for the project to be halted (or at least delayed) and for a proper environmental review to be undertaken.

In particular, the group voiced concerns that gas emissions from the plant would contribute to the degradation of the Great Barrier Reef and put Australia in jeopardy of overtaking their climate targets. A court hearing for the case is expected on 20 December this year.