Perdaman said construction by a joint venture of Italian firms Saipem and Webuild would generate an average of 2000 jobs over four years.

A similar number of workers will be engaged in expanding Woodside’s nearby Pluto gas export plant in a labour market already experiencing significant skill shortages.

New industry adjacent clashed with ancient art

The Perdaman urea plant will share the Burrup Peninsula Woodside’s North West Shelf and Pluto liquefied natural gas plants, gas-fed ammonia and explosives plants owned by Norway’s Yara, Rio Tinto’s iron ore export port and more than one million ancient rock engravings dating back more than 40,000 years.

The area, known as Murujuga by traditional custodians, was nominated for World Heritage listing by the federal government in February.

There are concerns that industrial pollution from the plant could accelerate the weathering of the thin coloured patina that covers the area’s rocks and makes the art visible.

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The WA Environmental Protection Authority concluded “there may be a threat of serious or irreversible damage” to the rock art from the plant’s emissions such as nitrous oxides.

The WA government gave environmental approval to the plant on the condition that in the future it could be ordered to cut any damaging emissions to protect the art.

The project has the support of the Murujuga Aboriginal Corporation but is opposed by Save our Songlines, a group led by traditional custodians Raelene Cooper and Josie Alec.

In August 2022, Environment Minister Tanya Plibersek rejected their request to use section 9 of federal Aboriginal heritage laws to halt work on the project that will involve the relocation of some sacred artefacts.

But in September, Plibersek used section 10 of the laws to initiate an independent review to determine the ancient art is threatened by industry.

Backing from government and infrastructure investors

US-based Global Infrastructure Partners has invested in both projects. Privately-owned Perdaman did not disclose the terms of its deal with GIP.

When Woodside sold 49 per cent of the Pluto plant expansion to GIP in 2021 it retained most of the risks from cost or schedule blowouts or adverse regulatory changes making the purchase more palatable for infrastructure investors that normally seek low-risk destinations for their money.

The plant has been strongly backed by the WA Labor government and successive federal governments.

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The federal government’s Northern Australian Infrastructure Facility has backed Perdaman with $475 million of financing; $220 million direct to the project, $160 million to the Pilbara Ports Authority for a wharf upgrade, and $95 million for WA’s Water Corporation to expand the supply of desalinated water.

The WA government has committed to spend $48 million on supporting infrastructure. Additional support came from Export Finance Australia.

Premier Mark McGowan said the investment underlined that the Pilbara was the engine room of Australia’s economy.

“My Government is proud to support developments like the Perdaman Urea Project that will deliver decades of economic benefits for WA, creating local jobs and diversifying the Pilbara economy,” he said.

WA gas market to tighten

The foundation for the investment is a deal Perdaman signed with Woodside five years ago for the supply of 125 terajoules a day of gas for 20 to 25 years from the proposed Scarborough gas field.

The plant will take the bulk of the 180 terajoules of gas a day expected to flow from Scarborough to the WA market under the state government’s domestic gas reservation arrangements for gas export plants.

The final investment decision on the urea plant was expected a few months after Woodside committed to Scarborough in November 2021 but was delayed while financing was secured.

Rambal’s success may bring forward an expected gas shortfall in WA.

In December the Australian Energy Market Operator forecast the state that is Australia’s biggest gas exporter would have a shortage of the fuel from 2030 on the assumption the Perdaman plant did not process and Woodside would sell the gas elsewhere.

The shortage is now likely to be brought forward to 2027.

The plant will produce about 650,000 tonnes of greenhouse gases a year which the stste government has required to be gradually reduced to zero by 2050, starting in 2030.