£8.7bn Australian LNG project given final approval

23 November 2021

A major A$16.2bn (£8.7bn) gas project has been given final approval which will see the development of an oil and gas field off Australia’s northwest coast. Approval for the Scarborough project, a joint venture between energy giant Woodside and BHP, was given on November 22 before the two companies announced a merger of BHP’s oil and gas portfolio with Woodside.

Pluto LNG Plant, Karratha - Image: Woodside Energy

The Scarborough LNG development is one of the largest fossil fuel projects in Australia for several years. The Scarborough field is located approximately 375 km off the coast of Western Australia and is estimated to contain 11.1 trillion cubic feet (100%) of dry gas. Development of Scarborough will include the installation of a floating production unit (FPU) with eight wells drilled in the initial phase and thirteen wells drilled over the life of the field.

The gas will be transported to the Pluto LNG plant, an onshore LNG processing facility located near Karratha in the northwest of Western Australia, through a new trunkline of approximately 430 km. Scarborough gas processed through Pluto Train 2 will be one of the lowest carbon intensity sources of LNG delivered to customers in north Asia, with first LNG cargo targeted for 2026, Woodside said.

On the same day that final approval was given to the Scarborough development, Woodside and BHP signed a binding share sale agreement (SSA) for the merger of BHP’s oil and gas portfolio with Woodside. The merger has created one of the world’s largest oil and gas companies. BHP said the combined company will have a high margin oil portfolio, long life LNG assets and the financial resilience to help supply the energy needed for global growth and development over the energy transition.

BHP CEO Mike Henry said: “Merging our petroleum business with Woodside creates a large, more resilient company, better able to navigate the energy transition and grow value while doing so. Through the merger we will provide value and choice for BHP shareholders, and unlock synergies in how these assets are managed.”

Woodside CEO Meg O’Neill said: “Woodside and BHP’s respective oil and gas portfolios and experienced teams are better together. The combination will deliver the increased scale, diversity and resilience to better navigate the energy transition. We will have the balance sheet, cash flow and financial strength to help fund planned developments in the near-term, invest in future energy opportunities and return value to our shareholders through the cycle. Our emissions reduction targets will apply to the combined portfolio, supporting our aspiration to be net-zero by 2050 and our strategy to supply lower-carbon energy to our customers across the globe."