Woodside Petroleum and BHP Group have made a final investment decisions (FIDs) to develop the $12 Scarborough gas project and expand Pluto LNG in Australia.

Located approximately 375km off the coast of Western Australia, the Scarborough field is estimated to hold 11.1 trillion cubic feet (100%) of dry gas.

The expansion of Pluto LNG processing facility will include the construction of Pluto Train 2, associated domestic gas processing facilities, supporting infrastructure and modifications to Pluto Train 1.

The LNG project will be developed to process Scarborough gas.

The development of Scarborough will comprise the installation of a floating production unit (FPU) with eight wells drilled in the initial phase. A total of 13 wells are planned to be drilled over the life of the Scarborough field.

Gas produced from the field will be transported to Pluto LNG through a new trunkline of nearly 430km.

The first LNG cargo from the Scarborough project is targeted to be delivered in 2026.

The Scarborough joint venture consists of Woodside Energy Scarborough with a 73.5% stake and BHP Petroleum (Australia) with the remaining 26.5% stake.

Woodside CEO Meg O’Neill said: “Today’s decisions set Woodside on a transformative path. 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 main contractors for the Scarborough gas project include McDermott for the FPU, Subsea Integration Alliance for subsea hardware, risers and flowlines, and Valaris for drilling.

Recently, Woodside reached an agreement with Global Infrastructure Partners (GIP) to sell a 49% stake in the Pluto Train 2 joint venture.

The development of Pluto Train 2 is estimated to cost $5.6bn.

US-based company Bechtel is the engineering, procurement and construction (EPC) contractor for Pluto Train 2 and integration into existing Pluto LNG facilities.

Separately, Woodside signed a binding agreement to merge BHP’s oil and gas portfolio to create a A$41bn ($29.8bn) energy company.

The two companies signed a merger commitment deed in August this year.

The combined entity is expected to become one of the top 10 energy companies in the world based on production volumes.