Woodside sells 49% stake in Pluto Train 2 LNG project

Woodside Petroleum Ltd. is selling a 49% nonoperating participating interest in the 5-million tonne/year Pluto Train 2 joint venture to Global Infrastructure Partners (GIP). Pluto Train 2 is part of Woodside’s Scarborough offshore development and includes a new LNG train to be built at the existing Pluto LNG onshore site, with the first cargo expected to ship 2026.

Completion of the deal is subject to conditions including final investment decisions (FID) for the Pluto Train 2 and Scarborough developments. Woodside is expected to take Scarborough FID on Dec. 15, 2021. The company received nearshore environmental approval for the project earlier this year (OGJ Online, Aug. 12, 2021).

Following completion Woodside will hold a 51% participating interest in the Pluto Train 2 joint venture and remain as operator. Pluto Train 2 development is expected to be supported by a long-term processing and services agreement between the Pluto Train 2 and Scarborough joint ventures.

Woodside expects Pluto Train 2 to cost US$5.6 billion. In addition to its 49% share of capital expenditure, the joint venture arrangements require GIP to fund an additional $835 million. Woodside’s joint venture capital contributions will be reduced accordingly. Woodside and GIP also signed a project commitment agreement (PCA) as the part of the deal. The PCA includes provisions for GIP to be compensated for exposure to additional Scope 1 emissions liabilities above agreed baselines, and to sell its 49% interest back to Woodside if the status of key regulatory approvals materially changes.

The effective date of the sale is Oct. 1, 2021, and completion is expected January 2022.

Pluto LNG is an integrated offshore and onshore LNG plant near Karratha in the northwest of Western Australia. The first cargo from Pluto Train 1 was delivered in 2012. Expansion of Pluto LNG will include the construction of Pluto Train 2, associated infrastructure, and modifications to Pluto Train 1 to allow it to process Scarborough gas. Woodside is targeting emissions reductions of 30% by 2030 and net zero by 2050 at Pluto LNG, including Pluto Train 2 and the proposed development of the Scarborough gas resource.