Woodside and BHP to merge operations

BHP Group is to merge its oil and gas portfolio with Woodside Petroleum to create a global top 10 independent energy company by production and the largest energy company listed on the Australian Securities Exchange (ASX).

The two companies have also given final backing to a planned $12bn development of the Scarborough natural gas field off Western Australia and expansion of the onshore Pluto LNG liquefaction plant. Some 8mn t/y of LNG is expected to be handling by the proposed second train at Pluto, with the first cargo slated for 2026.

As part of the deal, Woodside entered into an agreement to sell 49% of the planned second LNG train at the Pluto processing plant to private equity group Global Infrastructure Partners.

According to Woodside CEO Meg O’Neill: ‘The Scarborough reservoir contains only around 0.1% carbon dioxide, and Scarborough gas processed through the efficient and expanded Pluto LNG facility supports the decarbonisation goals of our customers in Asia.’

The Scarborough field is estimated to contain 11.1tn cf of dry gas. Development will include the installation of a floating production unit (FPU) with eight wells drilled in the initial phase and 13 wells drilled over the life of the field. The gas will be transported to Pluto LNG through a new 430 km trunkline. Woodside holds a 73.5% stake in Scarborough, with BHP holding the remaining 26.5% interest.

The Pluto joint venture comprises Woodside (90%), Kansai Electric Power (5%) and Tokyo Gas (5%). On completion of the Pluto Train 2 sell-down, the Pluto Train 2 joint venture will comprise Woodside (51%) and Global Infrastructure Partners (49%).

Pluto LNG facility
Photo: Woodside Petroleum