15/11/2021 - 10:00

Woodside sells Pluto stake to GIP

15/11/2021 - 10:00

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Global Infrastructure Partners will join Woodside Petroleum’s $US5.6 billion Pluto LNG expansion, having struck a deal to acquire a 49 per cent stake in the project.

Woodside sells Pluto stake to GIP
A final investment decision for Pluto Train 2 is expected next month. Photo: Woodside Petroleum

Global Infrastructure Partners will join Woodside Petroleum’s $US5.6 billion Pluto LNG expansion, having struck a deal to acquire a 49 per cent stake in the project.

The expansion includes a new LNG train and domestic gas facilities to be built at Woodside’s existing Pluto facility near Karratha, which will process gas from the company's $15.8 billion Scarborough offshore development.

In addition to its 49 per cent share of the capital expenditure for Pluto Train 2, amounting to about $US2.7 billion, US-based GIP will contribute $US835 million toward the project, reducing Woodside's capital expenditure requirements accordingly.

The deal is expected to be completed on January 1, with Woodside to hold a 51 per cent interest in the joint venture and remain as operator.

The agreement is subject to a number of conditions, including that Woodside announces a final investment decision for both Pluto Train 2 and Scarborough, expected in mid-December.

Woodside is also planning to sell down its stake in the Scarborough development, where production is scheduled to start between 2023 and 2025.

It owns 73.5 per cent of the project and will acquire the remaining 26.5 per cent interest from BHP when the companies merge their petroleum assets.

“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,” Woodside chief executive Meg O’Neill said.

“Pluto Train 2 will be one of Australia’s most efficient LNG trains with Scarborough gas containing virtually no carbon dioxide, this is an attractive investment in a decarbonising world.”

GIP chairman and managing partner Adebayo Ogunlesi said LNG was expected to play a critical role in the global transition toward carbon neutrality in the coming decades.

“We are particularly attracted to the modern and efficient technologies Woodside has adopted, making LNG from Pluto Train 2 one of the lowest carbon intensity sources of LNG delivered into Asia,” he said.

“We fully support Woodside’s net zero emissions targets for Pluto LNG including Pluto Train 2, and all its wider commitments to the community.”

GIP will complete its purchase of the Pluto Train 2 interest through investment vehicle Sharon Acquirer Trust.

The deal includes other related agreements including provisions for GIP to be compensated for exposure to additional scope one emissions liabilities above agreed baselines and to sell back the Pluto interest if the status of key regulatory approvals materially changes.

Morgan Stanley Wealth Management and Rothschild are acting as financial advisers to Woodside and Ashurst as legal adviser.

GIP’s legal adviser is Allens.

Woodside’s shares were up 1.6 per cent at 12:26pm AEDT to trade at $22.61.

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