MELBOURNE (Reuters) - Chevron Corp could face tougher emissions curbs at Wheatstone LNG in Western Australia after the state reviews environmental conditions imposed on the $34-billion project.
The state government has asked the Environmental Protection Authority (EPA) to review Wheatstone following the repeal of the Clean Energy Act, which took effect in 2012 and led the state to waive some conditions set when the project was approved in 2011.
The original approval terms, which required Wheatstone to offset 2.6 million tonnes a year of reservoir carbon dioxide emissions, were waived after the Clean Energy Act.
"The EPA will now carry out an inquiry into the current greenhouse gas condition placed on the project to ensure it is in line with contemporary best practice," a spokeswoman for state Environment Minister Stephen Dawson said in emailed comments.
Chevron, which committed to a A$13-million environmental offsets package under the initial Wheatstone approval, including managing habitats for whales, dugongs and dolphins in waters near its operations, said it wanted a national approach to managing emissions.
"Chevron is disappointed by the WA government's recent direction to the EPA regarding the ministerial conditions, given emissions from the Wheatstone project are regulated by the Australian government's safeguard mechanism," a Chevron spokeswoman said in emailed comments.
Since Chevron invested in Wheatstone in 2011 under the original emissions condition, reinstatement of the carbon offset requirement would be unlikely to dent assumptions around the project's economics.
Chevron is operator and 64 percent owner of Wheatstone, alongside Kuwait Foreign Petroleum Exploration Co (KUFPEC), Woodside Petroleum, Japan's Kyushu Electric Power Co and JERA.
(Reporting by Sonali Paul; Editing by Clarence Fernandez)