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Bloomberg
BHP Group and Woodside Petroleum Ltd approved investment in a $12 billion Australian gas project as the companies also confirmed details of a merger to combine their energy assets.
BHP agreed in August to merge its oil and gas business with Woodside to create a top 10 global energy producer. The deal, which is expected create synergies of over $400 million, is slated to be completed in
the second quarter of 2022, pending shareholder approval,
the company said.
Woodside, Australia’s biggest natural gas exporter, said in a separate statement that final investment decisions had been made to approve the development of the Scarborough gas field offshore Western Australia and an expansion of the onshore Pluto processing facility. The company agreed to sell a stake in the Pluto project to a US private equity fund, clearing one of the last obstacles to an investment decision on Scarborough.
“Woodside’s five-year saga to sanction Scarborough has finally come to fruition,†said Credit Suisse energy analyst Saul Kavonic. He said the newly merged company will benefit from “reinvigorated†LNG resources and growth prospects from BHP Petroleum’s global footprint.
Scarborough is one of just a handful of natural gas export projects to win approval in the last few years amid mounting pressure on the industry to lower emissions and as consumers set ambitious green goals. With the energy transition accelerating, the outlook for LNG demand beyond 2030 is uncertain, BloombergNEF analysts said in a report in June.