Woodside Petroleum has agreed to buy half of BHP Billiton’s stake in the Scarborough gas field offshore Western Australia for approximately £300.53 million.
The decision could help accelerate the development of a major US$10 billion (£7.5 billion) liquefied natural gas (LNG) project that has been shelved since 2014.
“We look forward to working with ExxonMobil and BHP Billiton following completion of the transaction to progress commercialisation of these world-class resources,” Woodside CEO Peter Coleman, said.
Woodside Acquisition Could Revive Major LNG Project
According to the CEO, this acquisition comes to complement Woodside’s growth strategy and leverage its deep water and LNG capabilities.
It follows an earlier acquisition of ConocoPhillips’ stake in three deep water oil blocks located off the cost of Senegal for US$350 million (£262.9 million) and recent gas discoveries made by Woodside in Myanmar.
Under the recent agreement, the company will pay BHP 330 million Australian dollars (£188.36 million) on completion of the deal and 198 million Australian dollars (£113 million) when a final investment decision (FID) is made to develop the gas field.
LNG tanker carrying a cargo to the North West Shelf Project
In return, Woodside will receive a 25% and a 50% stake in the two offshore permits that make up the field, and a 50% stake in two others containing the Jupiter and Thebe fields.
The three Scarborough gas fields included in the sales agreement hold probable reserves of 8.7 trillion cubic feet of gas and are part of the planned LNG project.
Scarborough Could Supply North West Shelf LNG
The potential development, held by BHP and US supermajor ExxonMobil, has been shelved following the downfall in oil and gas prices in mid-2014.
These remotely-located fields are seen as the best option to supply gas to Australia’s oldest LNG plant, North West Shelf LNG, owned by BHP, BP, Chevron, Shell, MIMI and Woodside.
The planned LNG project was put on the back burner as a result of falling prices and rising competition from the US.
According to a statement by BHP at the time, the development could become the world’s largest floating LNG project but, while significant progress had been made, the JV participants still needed to find ways to make it more profitable.