Unlike some other LNG sales contracts signed recently by Woodside, the RWE deal is not subject to a final investment decision (FID) on the Scarborough project, which also involves an expansion of the onshore Pluto LNG plant near Karratha.
“Customers are increasingly seeking to secure new energy supplies in a timeframe which supports the development of our Scarborough offshore gas resource and the expansion of the Pluto facility with the addition of a second LNG production train,” Ms O’Neill said.
“This agreement with RWE is another demonstration of the momentum we are gathering ahead of our targeted FID on Scarborough and Pluto Train 2 in the second half of this year.”
She added that the deal also provides an opportunity for Woodside and RWE to explore the potential for carbon-neutral LNG production and trading. The two companies already have an initial deal to discuss opportunities in hydrogen, where RWE is pursuing about 30 projects, mostly in Europe.
RWE Supply & Trading’s commercial head for gas supply, Andree Stracke, said the LNG volumes from Woodside would provide a platform to further develop the company’s business in Asia.
Woodside recently expanded an LNG sales contract with another Germany-based energy trader, Uniper, in a deal that is conditional on a final go-ahead being given to develop Scarborough.
Morgan Stanley analyst Adam Martin said the likelihood of Woodside sanctioning the Scarborough/Pluto-2 project in the December half had increased judging by the update at the results briefing on Thursday. He assessed the probability of a positive final investment decision as “quite high unless further unforeseen macro events occur”.
Woodside put Scarborough on hold after the oil price crash in March 2020 as oil and gas companies across the globe reined in capital spending.
Mr Martin still noted some hurdles to cross before the project could get the green light, however, including final environmental approvals and Woodside’s targeted sell-down of a 50 per cent stake in Pluto-2 to reduce funding requirements.