SYDNEY, AAP – Woodside boss Meg O’Neill claimed the company will still meet its carbon reduction targets while going ahead with the Scarborough gas project off the West Australian coast.
Environmentalists say the $16 billion project will produce 1.6 billion tonnes of carbon, equivalent to 15 coal power stations.
Ms O’Neill on Tuesday was conscious of the concerns during an investor call.
“I want to emphasise the point we can both develop Scarborough and achieve our emission reduction targets,” she said.
Woodside is aiming to achieve net zero direct emissions by 2050 or sooner and has targets of 15 per cent reduction by 2025 and 30 per cent by 2030.
Ms O’Neill said the company was making design improvements to reduce greenhouse gas intensity and the project would be one of the lowest-carbon LNG sources in Australia.
The Scarborough gas field will connect a floating production unit at sea to the Pluto LNG onshore plant via a 430km pipeline. A second Pluto train will be added to send gas from the 11.1 trillion cubic feet site to shore.
“The Scarborough fields are gigantic. It’s an area the size of Singapore,” Ms O’Neill said.
The first cargo is due in 2026 and about 60 per cent of project capacity has been contracted to customers.
Analysts questioned whether there would be enough long-term demand to justify the investment given the shift to cleaner fuels.
Ms O’Neill said surging energy prices during the pandemic had shown that supply was not infinite.
“What we’re seeing now is significant tightness in the market,” she said.
“Prices have been at unprecedented levels and remain at unprecedented levels.
“There were buyers last year who told us they were less interested, who are now calling.”
The Monday decision to proceed was revealed along with news Woodside had agreed on a share sale to buy BHP’s oil and gas portfolio.
The expanded Woodside will be owned 52 per cent by Woodside shareholders and 48 per cent by BHP investors. The company will have assets in Australia, the Gulf of Mexico and the Caribbean.
Woodside said its dividend policy remained unchanged.