HomeNewsWoodside open to talks with Chinese firms for Scarborough gas project

Woodside open to talks with Chinese firms for Scarborough gas project

5/16/2023

(Reuters) - Woodside Energy Group said on Tuesday it is open to talks with Chinese firms to invest in its $12-B Scarborough liquefied natural gas project in Australia.

The company has also started talks with a number of prospective buyers for LNG supplies from the project, Woodside Chief Executive Meg O'Neill told reporters on the sidelines of the APPEA industry conference.

"At this point in time, we're not talking to any Chinese prospective partners, but we would welcome the opportunity to bring a partner in," she said.

"I've said for a while that we want a quality counterparty who recognizes the value of Scarborough and pays us a fair price, and there's plenty of Chinese companies that certainly meet the criteria of a quality counterparty."

The proposed Scarborough plant is Woodside's biggest growth project and had been 30% complete as of April.

Woodside said in February that its Scarborough and Pluto Train 2 projects remain on track for targeted first LNG production in 2026.

O'Neill said Woodside remains confident about Browse LNG, its other joint venture project, despite Shell's exit.

"There's still a very strong appetite for Browse LNG," she said, as gas from the project is rich and well-suited for Japan.

"The Japanese market is quite interested and remains very interested in Browse gas. U.S. LNG is quite lean, and so it's not as good a fit for their system."

So-called rich natural gas refers to that with a higher calorific value, whereas lean has a low calorific value.

BP became Browse's largest shareholder after it agreed last month to buy Shell's 27% stake in the project.

The Browse project, estimated to cost $20.5 billion, has been on the drawing board for years but is now being considered as a replacement for ageing gas fields to supply the North West Shelf LNG plant.

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