The Australian Conservation Foundation has dropped its two-year-old Federal Court challenge to the environmental approval for Woodside Energy’s Scarborough gas project in Western Australia, removing the final legal hurdle to the development of the $US12.5 billion ($18.7 billion) venture.

Woodside and the ACF, which is represented by the Environmental Defenders Office, “agreed to dismiss” the challenge, the Perth-based oil and gas producer said on Monday.