Woodside Agrees to Sell 49% Stake in Pluto Train 2 to GIP
Global Infrastructure Partners - Press release
Woodside has entered into a sale and purchase agreement with Global Infrastructure Partners (GIP) for the
sale of a 49% non-operating participating interest in the Pluto Train 2 Joint Venture (Transaction).
Pluto Train 2 is a key component of the proposed 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 is US$5.6 billion (100% project).
In addition to its 49% share of capital expenditure, the joint venture arrangements require GIP to fund an
additional amount of construction capital expenditure of approximately US$835 million. Woodside’s joint
venture capital contributions will be reduced accordingly. The final quantum of GIP’s capital contribution is
dependent on interest rate swap and foreign exchange rates on the date of the final investment decisions for
Scarborough and Pluto Train 2.
If the total capital expenditure incurred is less than US$5.6 billion, GIP will pay Woodside an additional
amount equal to 49% of the under-spend. In the event of a cost overrun, Woodside will fund up to
US$835 million in respect of a 49% share of any overrun. Delays to the expected start-up of production will
result in payments by Woodside to GIP in certain circumstances.
The development of Pluto Train 2 is expected 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.
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 to be compensated for exposure
to additional Scope 1 emissions liabilities above agreed baselines, and to sell its 49% interest back to
Woodside if the status of key regulatory approvals materially changes.
Completion of the Transaction is subject to conditions precedent including final investment decisions for the
Pluto Train 2 and Scarborough developments, Foreign Investment Review Board approval, execution of the
Scarborough PSA and relevant government and regulatory approvals.
Following completion Woodside will hold a 51% participating interest in the Pluto Train 2 Joint Venture and
remain as operator. The effective date of the Transaction is 1 October 2021 and completion is expected to
occur in January 2022.
Woodside CEO Meg O’Neill welcomed GIP to the Pluto Train 2 Joint Venture.
“We are very pleased to have GIP joining us in the development of Pluto Train 2, given their impressive
credentials and extensive global capability. We are looking forward to a successful, long-term relationship
with them.
“GIP’s investment will help fund the expansion of the world-class Pluto LNG facility. The LNG supplied from
the expanded Pluto facility will assist our customers to achieve their decarbonisation goals through the
energy transition.
“The sale of the interest in Pluto Train 2 is a significant milestone as we progress towards a final investment
decision on our Scarborough development, further de-risking this globally competitive investment.
“The development of Scarborough gas through Pluto Train 2 will deliver significant value to our shareholders,
create thousands of jobs in Western Australia and generate tax revenues for decades to come.
“Pluto Train 2 will be one of Australia’s most efficient LNG trains and with Scarborough gas containing
virtually no carbon dioxide, this is an attractive investment in a decarbonising world,” she said.
GIP Chairman and Managing Partner Adebayo Ogunlesi said LNG is expected to play a critical role in
transitioning the world toward carbon neutrality over the coming decades.
“We are delighted to partner with Woodside, a global leader in operating responsibly and safely, to develop
this world-class facility.
“We are particularly attracted to the modern and efficient technologies Woodside has adopted, making LNG
from Pluto Train 2 one of the lowest carbon intensity sources of LNG delivered into Asia. We fully support
Woodside’s net zero emissions targets for Pluto LNG including Pluto Train 2, and all its wider commitments to
the community,” he said.
The purchasing entity is Sharon Acquirer Trust, an investment entity owned by funds managed or advised by
GIP.
Woodside’s financial advisers are Morgan Stanley Australia Limited and Rothschild & Co., and its legal
adviser is Ashurst.
GIP’s legal adviser is Allens.
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