Woodside and BHP have announced a final positive investment decision to go ahead with the Scarborough to Pluto Train 2 project in Western Australia.
The $16 billion liquefied natural gas (LNG) development will see gas from the Scarborough resource processed at Woodside’s Pluto LNG facility on the Burrup Peninsula, near Karratha.
As part of the development, a second LNG train and a new domestic gas facility at the Pluto site will be constructed.
Construction is scheduled to commence in 2022 and is expected to create 3,200 jobs. Once operational the project will support around 600 jobs.
Consistent with the WA Domestic Gas Policy, the Scarborough joint venture will make gas equivalent to 15 per cent of its LNG exports available to the domestic market.
The Scarborough project will support the production of eight million tonnes per annum of LNG through Pluto Trains 1 and 2, and a domestic gas commitment of around 180 TJ per day.
Around 1,400PJ of gas is expected to be supplied to the Western Australian market over the life of the Scarborough project.
The project is advancing despite opposition from environmental groups, with the Conservation Council of Western Australia launching legal action to require the project to undergo federal assessment under the Environmental Protection and Biodiversity Conservation Act.
The decision was also condemned by the Australasian Association for Corporate Responsibility. Environmental groups are expected to continue to push back against the decision, advocating for a transition away from oil and gas projects.
Woodside CEO, Meg O’Neill, said, “Scarborough will be a significant contributor to Woodside’s cash flows, the funding of future developments and new energy products, and shareholder returns.
“This capital-efficient development leverages Woodside’s existing infrastructure and our proven expertise in project execution.
“The contracting model, development concept and execution strategy have been designed to reduce cost risk and protect shareholder value.
“The Scarborough reservoir contains only around 0.1 per cent carbon dioxide, and Scarborough gas processed through the efficient and expanded Pluto LNG facility supports the decarbonisation goals of our customers in Asia.
“The final investment decision is underpinned by quality customer support with approximately 60 per cent of Scarborough capacity contracted, including domestic gas for the proposed Perdaman urea project.”
Western Australian Premier, Mark McGowan, said, “The announcement from Woodside and BHP that they have reached a positive final investment decision for the Scarborough and Pluto Train 2 projects is a boon for the state.
“In the coming days, we will execute agreements with the Scarborough and Pluto Train 2 joint ventures that will provide energy certainty for the state and support thousands of local jobs, as well as providing a transition fuel source for our major trading partners.”
State Development, Jobs and Trade Minister, Roger Cook, said, “LNG can be used globally as a transition fuel to displace more carbon-intensive fuels such as coal and there is strong demand in international markets that have made commitments to net zero emissions.”
