By Renju Jose
SYDNEY (Reuters) - Western Australia's environment regulator said on Monday it expects to release its recommendations on Woodside (OTC:WOPEY) Energy's Browse gas project in 2025, after a newspaper reported the huge project might be rejected by the regulator.
The $20.5 billion project in waters off Western Australia is the country's largest untapped gas resource but has been stuck on the drawing board for decades.
A report in the Sydney Morning Herald newspaper on Monday said the Western Australian Environmental Protection Authority's (EPA) preliminary comments sent to the company in February called the proposal terms "unacceptable".
"It is not appropriate to comment on any outcome until the assessment and appeals process are complete," EPA deputy chair Lee McIntosh said in an email.
Woodside's development plan has been under review since 2020, and the company has sought extensions to respond to the regulator, McIntosh said, adding final recommendations would go to the state government in 2025.
The company wants Browse to replace ageing gas fields to supply the North West Shelf LNG (liquefied natural gas) plant and meet demand from Australia's biggest trading partners, including China, Japan and South Korea.
Woodside declined to confirm if it had received a report from the EPA but said the company continued to work with regulators to progress environmental approvals for the project.
Shares of the company were down about 3% in late morning trade, largely in line with the fall in the broader market.
BP (NYSE:BP) holds a 44.33% stake in the project, while Japan Australia LNG (MIMI Browse) has 14.40% and PetroChina 10.67%. Woodside, the operator, owns a 30.60% stake.
Browse needs approvals from the state and federal governments. The federal Labor government views gas as a critical element in the country's transition to cleaner energy and in May backed long-term gas drilling despite aiming for net-zero carbon emissions by 2050.
Environmental groups oppose development of Browse, saying it poses threats to the endangered Pygmy Blue Whales and Green Turtles and would raise the risk of pollution and oil spills.