Woodside and BHP Group adjust Scarborough project stakes

BHP has marginally increased its stake in the Scarborough offshore LNG project by 1.5 per cent.

On Wednesday its partner Woodside announced to the ASX both companies had adjusted their stakes in two Scarborough project titles.

Gas from Scarborough is to be processed at the Pluto LNG plant near Karratha.

Woodside's 75 per cent stake in the project will drop to 73.5 per cent while BHP will hold the remaining 26.5 per cent.

Development of the Scarborough gas field would see 4 to 5 million tonnes per annum of additional gas delivered to Woodside's Pluto LNG facility in Karratha.

Woodside has been looking to line up gas sales and sell down part of its stake in Scarborough to help fund the project but talks slowed by travel curbs and weak gas prices following a coronavirus epidemic.

A 52 per cent increase in the size of the Scarborough gas field announced in November also threw a spanner in the works with Woodside rethinking how much of a stake it wanted in the project.

BHP and Woodside have also agreed to apply for production licences for both Scarborough titles.

"The production licence applications are another key step to unlocking the full value of the Scarborough resource through the expansion of our existing Pluto LNG facility," Woodside chief executive Peter Coleman said.

BHP Petroleum country manager Graham Salmond said they would continue to work with Woodside towards a development that would benefit shareholders, joint venture partners and the community.

“The proposed Scarborough development fits with our strategy of seeking to commercialise advantaged gas resources with potential future upside, and we continue to take positive steps in its development," he said.

Woodside is aiming for a final investment decision in 2020 for the Scarborough development, and first cargo in 2024.

Woodside posted this month an underlying profit, excluding one-off charges, of $1.06 billion for 2019, down from $1.42 billion a year earlier.

With Reuters

Source: Read Full Article