WOODSIDE Energy is backing the future of Liquified Natural Gas by acquiring partner Chevron’s interest in the North West Shelf Project.

In an asset swap Woodside will also acquire Chevron’s NWS Oil Project and the Angel Carbon Capture and Storage (CCS) Project, and Woodside will transfer all its interest in both the Wheatstone and Julimar-Brunello Projects to Chevron.

In an announcement on 19 December Woodside said Chevron will also make a cash payment to Woodside of up to $400 million.

The announcement said the transaction would streamline Woodside’s Australian portfolio and consolidate its focus on operated LNG assets.

It also simplifies NWS joint venture ownership, which it claims will unlock economic recovery of existing production and future development opportunities and will also strengthen near-term cash flow to support shareholder distributions and ongoing investments.

Woodside CEO Meg O’Neill said the strategic and commercial rationale of the asset swap is compelling for Woodside.

“This transaction simplifies our portfolio, improving our focus and efficiency by consolidating our position in our operated LNG assets,” Ms O’Neill said.

“It is immediately cash flow accretive and includes a cash payment upon both execution and completion.

“This year, the North West Shelf Project and its Karratha Gas Plant celebrated 40 years of operations. The Western Australian Government’s recent decision to extend the environmental approval for the North West Shelf Project supports its ongoing contribution to reliable energy supply for local and global customers.

“This transaction creates greater opportunity to fill emerging processing capacity and maximise value accretive recovery from the North West Shelf Project.

“It also provides greater alignment and improves the commercial prospects for the proposed Browse to North West Shelf Project.

“Additionally, this improves joint venture planning for decarbonisation opportunities at Karratha Gas Plant. Our increased equity in the Angel CCS Project also supports future development of this large-scale, multi-user carbon capture and storage hub in Western Australia.”

The effective date of the transaction is 1 January 2024.