The EPA identified several potential significant issues including potential impacts on Marine Environmental Quality, Air Quality and social surrounds - ancient rock art - from ongoing atmospheric emissions and discharges as well as potential changes to the composition of current emissions from the project.
It is not the first time that the Burrup Peninsula has been a cause of concern for the EPA or state government.
The region is home to some of the world's oldest examples of rock art.
The WA government signed a letter of support with the Murujuga Aboriginal Corp in August to begin the process to nominate the Peninsula for World Heritage Listing, which if successful it would give the state five UNESCO sites and two listed solely for cultural heritage.
Following the agreement, the state government announced a new reference group to help protect the art and monitor changes caused by emissions from nearby gas and petrochemical projects.
"Several preliminary key environmental factors are complex. Detailed assessment is required to determine the extent of the proposal's direct and indirect impacts, and how the environmental issues could be managed," the decision said.
The Burrup Peninsula is also hub for resources including Woodside's NWS Project as well as iron ore facilities, and a proposed ammonia plant by Perdaman.
Woodside submitted the project proposal for the extension in late November, saying it was required in order to enable the long-term processing of third party gas and fluids as well as North West Shelf Joint Venture field resources through the facilities until 2070.
Just last month Woodside announced that the NWS Project joint venture has signed a non-binding preliminary agreement with the Browse joint venture and Chevron to process their respective offshore gas resources through the project facilities on the Burrup Peninsula.
"Central to our vision for the Burrup Hub is the transition of the Karratha Gas Plant into a third-party tolling facility as the NWS joint venture fields reach the end of their lives," Woodside CEO Peter Coleman said then.
"The Browse Joint Venture will be the anchor tenant underpinning that transition and this preliminary agreement enables the participants to progress toward an earlier final investment decision to develop the gas resource targeted for 2020."
Woodside as operator of the NWS Project, is proposing to extend the life of the Karratha gas plant by bringing new offshore reserves onshore for processing through this existing world class-facility.
Woodside is expected to continue to invest in the long-term future of the NWS and is pursuing new opportunities through 2019, pending the outcome of its applications to expand the project, it said.
Environmental referrals were submitted to the WA Environmental Protection Authority and the Commonwealth Department of Environment and Energy on 14 November 2018.
Woodside was trading at $31.10 per share this morning.