Woodside and BHP have agreed that the Perth-headquartered independent will be operator of the Scarborough gas field.
The deal comes in the wake of Woodside securing a 75% stake in the offshore field, located northwest Australia, when it acquired ExxonMobil’s 50% interest in WA-1-R and the Scarborough Joint Venture Agreement.
Completion of the transaction has been targeted for the end of March.
In a market update to the ASX, Woodside said BHP had waived its pre-emption rights and given consent to the US$744million transaction between Woodside and BHP.
Under the deal Woodside said BHP has the option to buy an additional 10% of Scarborough at any time prior to the end of the calendar year in 2019.
The two companies also agreed to discuss potential offers to sell up to 10% of Scarborough to foundation LNG buyers on a pro-rata basis; and technical and commercial arrangements for Scarborough’s development.
Woodside is targeting a final investment decision for Scarborough by 2020 to pipe six million tonnes per annum of gas to the Pluto LNG plant in the Pilbara.
Woodside CEO Peter Coleman described the announcement as an anchor for the development Scarborough.
“I am pleased BHP has agreed that Woodside will become operator of the Scarborough Development,” Coleman said. “The Scarborough joint venture will now be focused on finalising the development concept prior to entering FEED and positioning for FID in 2020.”