Woodside completes Pluto Train 2 sell-down to GIP

Pluto Train 2 (Woodside challenge)
Pluto Train 2 (Image: Jarrad Seng)

Woodside has completed the sale of a 49 per cent non-operating participating interest in the Pluto Train 2 Joint Venture to Global Infrastructure Partners (GIP).

This follows Woodside’s announcement on November 15 last year that it had entered into a sale and purchase agreement with GIP. On November 22 the Pluto Train 2 Joint Venture announced its final investment decision along with the final investment decision for the Scarborough development.

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Pluto Train 2 is a key component of the Scarborough development and includes a new LNG train and domestic gas facilities to be constructed at the existing Pluto LNG onshore facility. The estimated capital expenditure for the development of Pluto Train 2 from the effective date of October 1 is US$5.6 billion.

The joint venture arrangements require GIP to fund its 49 per cent share of capital expenditure and an additional amount of construction capital expenditure of approximately US$822 million. Woodside’s capital expenditure will be reduced accordingly. The first LNG cargo from Pluto Train 2 is targeted for 2026.

Woodside CEO Meg O’Neill said she looked forward to developing Pluto Train 2 in close collaboration with GIP.

“GIP brings established, global capabilities to the Pluto Train 2 Joint Venture which will support delivery of a world-class project.

“The development of Scarborough gas through Pluto Train 2 is expected to deliver significant value to our shareholders, create thousands of jobs and deliver energy to domestic and international customers for decades to come,” she said.

Pluto Train 2 Pluto LNG is an onshore LNG processing facility located near Karratha in the north-west of Western Australia. First cargo from the single-train facility was delivered in 2012. Expansion of Pluto LNG will include the construction of Pluto Train 2, associated domestic gas processing facilities, supporting infrastructure and modifications to Pluto Train 1 to allow it to process Scarborough gas.

The deal is being facilitated by a $4.8 billion syndicated loan from financial institutions including National Australia Bank, Australia and New Zealand Banking Group and Westpac, who were slammed this week by Market Forces for their participation in the investment, which is at odds with the banks’ professed net-zero commitments.

Environmental groups responded angrily to the news, with Greenpeace Australia Pacific program director Kate Smolski saying in a statement the deal was “grossly untenable”.

“As the world continues to decarbonise and turn their back on fossil fuel projects, this investment by Global Infrastructure Partners in one of the biggest carbon bombs Australia will ever know is grossly untenable and makes no financial sense,” Smolski said.

Related article: Woodside’s Scarborough project faces second Supreme Court challenge

“Woodside claims there’s a huge international market for their toxic gas around the world, but where is their long list of customers? For a fossil fuel source of this size, where is the demand? Their current customer offtake doesn’t match with the scale of the project whatsoever. The numbers simply don’t add up.

“As countries around the world pledge their commitment to net zero and renewable energy, GIP is risking their stakeholders’ coffers with a deal on infrastructure that will ultimately end up a doomed stranded asset, costing the taxpayers billions in decommissioning.”

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