(Bloomberg) — Australia’s natural gas sector secured a long-awaited regulatory victory with permission to extend the life of the nation’s biggest export plant, but the industry is still grappling with policy uncertainty that it says hampers investment.
The Woodside Energy Group Ltd.-operated North West Shelf project received provisional clearance on Wednesday to run to 2070 after a process that lasted more than six years. However, many other multibillion-dollar gas projects planned over the next decade are still waiting for approvals from state or federal government agencies.
“It’s an encouraging early sign, but the industry wants to see more action on approval reform before their appetite returns to Australia,” said Saul Kavonic, an energy analyst at MST Marquee. “Things that used to take months still take years.”
Stricter policies and legal challenges from environmental and indigenous groups have held up Australian gas developments, which are a major contributor to the nation’s status as one of the biggest per-capita polluters.
Investment in gas exploration in Australia has grown by just 15% in the past five years, compared with almost 30% globally, industry consultant Wood Mackenzie said in a report this week. The nation’s share in the investment portfolio of major international oil companies has fallen to 15% from more than 40% just over a decade ago, it said.
ExxonMobil Corp. has paused investments in recent years due to the regulatory instability, Australia Chair Simon Younger said in Brisbane this week. Meanwhile, Chevron Corp.’s Australia President Balaji Krishnamurthy stressed the importance of consistent policies that can endure over time at the industry gathering.
“There is a bit of alphabet soup in the energy space, and if the government is wanting to simplify that and have sharper delineation of roles and responsibilities, I think that would be welcomed by the industry,” Woodside Chief Executive Officer Meg O’Neill said at the Australian Energy Producers Conference conference.
The extension of North West Shelf will allow Woodside to seek sign-offs on Browse, an ambitious plan to send gas from massive offshore reserves to the liquefied natural gas plant. The company has amended that project, which is being assessed by Western Australia’s Environmental Protection Agency, to limit its impact on a major reef system.
The approval of the extension also comes in the same month Prime Minister Anthony Albanese’s Labor Party was resoundingly reelected, defying some forecasts that he would need support from the Greens or climate-focused independents to form government. Albanese has said the nation will need more gas to support renewables and to help the country meet its net zero commitments.
“I think I can speak for all my colleagues in the industry, we’re all ready to invest,” Kevin Gallagher, the CEO of gas producer Santos Ltd., said at the conference. “If we get the policy certainty, the regulatory clarity and stability that we need, we’re all ready to invest.”
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