Scarborough gas field
| Company type | Joint venture |
|---|---|
| Industry | Natural gas |
| Headquarters | Australia |
Area served | Indian Ocean, offshore Western Australia |
Key people | Woodside (operator, 75% owner), BHP (25% owner) |
| Products | Dry natural gas |
The Scarborough gas field is a natural gas field situated in the Indian Ocean, approximately northwest of Exmouth along the coast of Western Australia. This field contains an estimated Contingent Resource of around 7.3 trillion cubic feet of dry natural gas. In 2018, Woodside expanded its interest by acquiring ExxonMobil’s 50% share in the retention lease, supplementing the 25% stake it had already obtained from BHP in 2016. Currently, Woodside holds a 75% ownership and serves as the operator of the joint venture, while BHP maintains a 25% interest. On 7 April 2022, Woodside confirmed that it had secured the final approvals from both Australian federal and state governments for the project.
Offshore development concept
At present, Scarborough is not producing any gas. Woodside intends to develop the field by installing 12 subsea high-capacity gas wells connected to a semi-submersible platform anchored in water depths of approximately 900 meters. The topside facilities, weighing about 20,000 tonnes, will be equipped for gas dehydration and compression, facilitating transportation through a roughly 400-kilometer pipeline to Woodside’s Pluto LNG plant.
The reservoir consists of high-quality sandstone formations capable of yielding recoverable volumes exceeding 0.5 trillion cubic feet per well at relatively shallow depths between 900 and 1,000 meters beneath the seabed. The gas is classified as ‘sweet’ due to its low CO₂ content and absence of detectable H₂S. Nevertheless, independent assessments estimate that over its operational lifespan, the project could produce up to 1.6 billion tonnes of CO₂ emissions—comparable to the output of 15 coal-fired power stations. Some experts contend that proceeding with new oil or gas developments contradicts Australia’s climate objectives.
The development plan includes a phased drilling campaign aiming to have seven wells ready for start-up (RFSU). These wells will feature horizontal and high-angle drilling designs with lengths reaching approximately 2,500 meters, drawing on Woodside’s extensive experience in offshore developments across northwest Australia.
The proposed carbon steel trunkline will extend about 400 kilometers—shorter than other recent pipelines in the region—with cost and scheduling projections based on Woodside’s prior subsea projects in the North West Shelf and Exmouth vicinity. The Pluto LNG facility was originally constructed with a shore crossing designed to accommodate a second trunkline, enabling potential future expansion.
| Commonwealth title | WA-1-R |
| Location | Approximately 300 km offshore, Western Australia |
| Contingent Resource estimate | 7.3 Tcf (100%) dry gas (2C) |
| Water depth | 950 meters |
| Gas composition | 96% methane, 4% nitrogen, 50 ppm CO₂ |
| Average well recovery | 0.5 Tcf per well |
| Wells at RFSU | Seven |
| Trunkline distance | 400 km |
| Cost estimate (100%)¹ | Upstream: $6.0 billion
Downstream: $2.5 – $3.7 billion Total: $8.5 - $9.7 billion |
| Onshore² | Cost-effective brownfield expansion at Pluto LNG facility |
| 1. The cost estimate of US$8.5–9.7 billion (100% project) reflects a real terms 2018 Class 0 pre-concept select level figure including a contingency allowance of 25%.
Pre-final investment decision activities are projected to cost approximately $0.5 billion (100% project). 2. Subject to joint venture consent and regulatory or commercial arrangements. | |
Onshore development concept
The onshore development approach entails expanding the existing Woodside-operated Pluto LNG facility through a brownfield project. Historically, LNG expansion initiatives have provided cost-effective additional capacity alongside attractive financial returns. Comprehensive evaluations conducted in 2010 and 2011, which included front-end engineering design for a second LNG train at Pluto, together with Woodside’s market consultations in 2017, have positioned the company to accurately forecast expenses related to an LNG expansion train for Scarborough.
The gas composition from Scarborough is compatible with the Pluto LNG plant’s design, which is optimized for processing lean gas and removing nitrogen. Prior investments at the Pluto site, along with existing environmental permits for a second train, contribute to minimizing project risks.
Cost
Projected expenditures range between $8.5 billion and $9.7 billion (100% project basis, 2018 real terms, Class 0, pre-concept select phase), inclusive of a 25% contingency allowance. Activities preceding the final investment decision are anticipated to require approximately $0.5 billion (100% project). Woodside’s combined equity ownership in both the Scarborough resource and Pluto LNG infrastructure provides enhanced governance and development certainty. This synergy facilitates capturing value from the 7.3 Tcf (2C, 100%) Scarborough gas through a cost-efficient brownfield expansion of the highly reliable Pluto LNG facility.
Nonetheless, current cost projections are subject to ongoing legal and environmental disputes, including a Supreme Court of Western Australia case scheduled for 2021. Investors have voiced significant concerns regarding the proposed budget, describing it as "irrational" and lacking financial prudence. The merger and Final Investment Decision hinge on shareholder consent, with some stakeholders warning that the outcome could be detrimental both financially and in terms of climate impact.