BHP, Woodside in Scarborough gas tolling agreement

Australian oil and gas companies Woodside and BHP have reached an agreement on the tolling price for processing gas from the Scarborough offshore field at Woodside’s Pluto LNG facility on Western Australia’s Burrup Peninsula. The tolling price is valid to 31 March 2020.

The Scarborough gas field, discovered in 1979, is located off the coast of Western Australia approximately 220 kilometers northwest of Exmouth in 900 meters of water. It is one of the most remote of the Carnarvon Basin gas resources.

The agreed toll is based on BHP maintaining no more than a 25% interest in Scarborough (WA-1-R) up to final investment decision (FID), subject to BHP’s standard pre-emption rights, Woodside said in a statement on Monday.

Woodside’s interest in the Greater Scarborough area, which covers the Scarborough, Thebe, and Jupiter fields, comprises a 75 percent interest in WA-1-R – which contains the majority of the Scarborough field – and a 50 percent interest in each of WA-61-R, WA-62-R, and WA-63-R.

FID in 2020

Woodside CEO Peter Coleman said the agreement on the tolling price for Scarborough was another significant step towards the realization of the proposed Burrup Hub.

“This agreement on tolling price, together with the increase in Scarborough gas resources announced earlier this month, provides a compelling and aligned basis for BHP and Woodside to finalize the required conditional binding agreements by the end of the first quarter of 2020.

“It is a key milestone as we target a go-ahead for the development of the high-quality Scarborough gas resource through an expanded Pluto LNG facility. The joint venture is now in a strong position to proceed to FID in the first half of next year,” he said.

Scarborough gas would initially be processed on a deep-water floating production unit and transported through an approximately 430 km pipeline to be processed at the Pluto LNG facility. First LNG from the proposed development is targeted in 2024.

Worth reminding, Woodside earlier this month upgraded the estimated gross contingent resource (2C) dry gas volume for the Scarborough field to 11.1 tcf, up 52 percent from 7.3 tcf.

As a result of the volume increase, Greater Scarborough contains an estimated gross dry gas contingent resource (2C) volume of 13.0 tcf, a 41 percent increase from the previous 9.2 tcf.


Offshore Energy Today Staff

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