Woodside sells venture stake in push to expand Pluto LNG

WOODSIDE has sold a 49% stake in its venture to add a new LNG train to its Pluto plant in Western Australia, easing the way for investment in the Scarborough offshore gas field.

It has sold the stake in its Pluto Train 2 joint venture to Global Investment Partners (GIP) which will cover 49% of the project’s US$5.6bn worth of capital expenditure plus an extra US$835m.

Woodside CEO Meg O’Neill said: “The sale of the interest in Pluto Train 2 is a significant milestone as we progress towards a final investment decision on our Scarborough development, further de-risking this globally competitive investment.”

The Scarborough offshore field holds an estimated 13trn ft³ of gas. Plans are to install a floating production system above Scarborough, that would pass gas through a 430 km pipeline to the Pluto gas processing facility near Karratha in the northwest of Western Australia. The second Pluto train would double the facility’s processing capacity to around 10m t/y.

O’Neill has pitched the natural gas the project will produce as key to the energy transition, helping society move from dirtier fossil fuels to cleaner ones. The proposals for Pluto and Scarborough include a series of technological options for reducing operational emissions. These include the use of aero-derivative gas turbines for liquefaction and inlet air chilling that the company says will provide higher thermal efficiency and lower greenhouse gas emissions; the use of waste heat from turbine exhaust to provide heating duty on the Scarborough floating production unit that removes the need for fired boilers; and pre-cooling of incoming gas using a gas-gas heat exchanger rather than refrigeration.

However, moves to sanction a project in the wake of COP26 to produce gas that ultimately will be burned and release huge volumes of CO2 to the atmosphere has drawn the ire of environmentalists. Greenpeace Australia Pacific described the project as the “most climate-polluting project ever in Australia” and vowed to campaign to stop it.

Woodside and BHP are expected to make a final investment decision on Scarborough in December. The pair are currently negotiating a sale of BHP’s oil and gas business to Woodside, which would include the transfer of its minority stake in Scarborough. 

Completion of the deal with GIP is expected in January.