The development of Pluto Train 2 includes construction of a new LNG train and domestic gas facilities at the existing Pluto LNG onshore facility in Western Australia
Woodside will remain as operator of the Pluto Train 2 joint venture. (Credit: bstad from Pixabay)
Australian natural gas producer Woodside has signed an agreement with Global Infrastructure Partners (GIP) to sell a 49% stake in the Pluto Train 2 joint venture.
Estimated to cost $5.6bn, the development of Pluto Train 2 includes construction of a new LNG train and domestic gas facilities at the existing Pluto LNG onshore facility.
Located near Karratha in the northwest of Western Australia, Pluto LNG is an integrated offshore and onshore LNG processing facility that delivered first cargo in 2020.
Under the joint venture arrangements, GIP is required to fund an additional amount of construction capital expenditure of nearly $835m, apart from its 49% share of capital expenditure.
Woodside CEO Meg O’Neill said: “We are very pleased to have GIP joining us in the development of Pluto Train 2, given their impressive credentials and extensive global capability. We are looking forward to a successful, long-term relationship with them.
“GIP’s investment will help fund the expansion of the world-class Pluto LNG facility. The LNG supplied from the expanded Pluto facility will assist our customers to achieve their decarbonisation goals through the energy transition.
“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.”
Pluto Train 2 is a key part of the proposed Scarborough project, which involves the development of a gas resource located offshore, nearly 375 km west-northwest of the Burrup Peninsula.
The Scarborough field is estimated to contain 11.1 trillion cubic feet (Tcf) of dry gas.
In August this year, Woodside has revised the cost estimate of the Scarborough gas project by 5% to $12bn, compared to the previous cost estimate announced in November 2019.
The completion of the stake sale in Pluto Train 2 is expected to take place in January 2022.
It is subject to final investment decisions for the Pluto Train 2 and Scarborough developments, Foreign Investment Review Board approval, execution of the Scarborough PSA and relevant government and regulatory approvals.
Upon completion, Woodside will remain as operator of the Pluto Train 2 joint venture, with a stake of 51%.
Morgan Stanley Australia and Rothschild served as financial advisors to Woodside in connection with the transaction, while Ashurst acted as its legal advisor.
Meg O’Neill added: “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 development of Scarborough gas through Pluto Train 2 will deliver significant value to our shareholders, create thousands of jobs in Western Australia and generate tax revenues for decades to come.
“Pluto Train 2 will be one of Australia’s most efficient LNG trains and with Scarborough gas containing virtually no carbon dioxide, this is an attractive investment in a decarbonising world.”