Australia’s Woodside sells stake in second Pluto LNG train

Australian LNG player Woodside said it has agreed to sell a 49 percent stake in the planned second train at its Pluto LNG export facility on Western Australia’s Burrup Peninsula.

US-based Global Infrastructure Partners would buy the non-operating stake via Sharon Acquirer Trust, according to a Woodside statement on Monday.

Pluto Train 2 would process gas from the Scarborough gas resource and have a capacity of about 5 million tonnes per annum. The facility would also include domestic gas facilities.

Woodside expects capital expenditure for the development to reach about $5.6 billion.

In addition to its 49 percent share of capital expenditure, the joint venture arrangements require GIP to fund an additional amount of construction capital expenditure of about $835 million, Woodside said.

The final quantum of GIP’s capital contribution would dependent on interest rate swap and foreign exchange rates on the date of the final investment decisions for Scarborough and Pluto Train 2, it said.

Also, if the total capital expenditure incurred is less than $5.6 billion, GIP would pay Woodside an additional amount equal to 49 percent of the under-spend.

In the event of a cost overrun, Woodside would fund up to $835 million in respect of a 49 percent share of any overrun, while delays to the expected start-up of production would
result in payments by Woodside to GIP in certain circumstances.

Woodside said it expects the development of Pluto Train 2 to be supported by a long-term processing and services agreement (PSA) to be entered into between the Pluto Train 2 and Scarborough joint ventures.

Completion in January 2022

The transaction includes a number of other related agreements between Woodside and GIP including a project commitment agreement (PCA).

The PCA includes provisions for GIP such as compensation for exposure to additional Scope 1 emissions liabilities above agreed baselines, and to sell its 49 percent interest back to
Woodside if the status of key regulatory approvals materially changes.

Woodside says the completion of the transaction remains subject to conditions precedent including final investment decisions for the Pluto Train 2 and Scarborough developments.

This also includes Foreign Investment Review Board approval, execution of the Scarborough PSA, and relevant government and regulatory approvals.

Following completion, Woodside will hold a 51 percent participating interest in the Pluto Train 2 joint venture and remain as operator.

Woodside said the effective date of the transaction is October 1, 2021, while the firm expects completion to occur in January 2022.

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