Woodside to streamline portfolio with Chevron asset swap to unlock LNG value

Woodside Energy has announced a transformative strategic asset swap agreement with Chevron, enhancing its focus on liquefied natural gas (LNG) operations while simplifying its portfolio. As part of the deal, Woodside will acquire Chevron’s stakes in the North West Shelf (NWS) Project, the NWS Oil Project, and the Angel Carbon Capture Storage (CCS) Project. In exchange, Chevron will assume Woodside’s interests in the Wheatstone and Julimar-Brunello Projects and provide a cash payment of up to $400 million.

Strategic Focus on LNG Assets

Meg O’Neill, CEO of Woodside, stated that the strategic asset swap aligns with the company’s goal to optimise efficiency and maximise value from its operated LNG projects. This deal consolidates ownership within the North West Shelf joint venture, a cornerstone of Australia’s liquefied natural gas production, and unlocks significant opportunities for current operations and future energy projects.

Marking its 40th year of operations, the North West Shelf Project has been reinforced by recent environmental approval extensions granted by the Western Australian Government. These approvals ensure its ongoing contribution to energy security for local and global markets. The project, which includes the Karratha Gas Plant, will benefit from streamlined ownership, enabling more effective resource recovery and commercial alignment.

Additionally, the transaction supports the Browse to North West Shelf Project, which is poised to integrate regional LNG resources, further strengthening Woodside’s position in Australia’s liquefied natural gas landscape.

Financial and Environmental Benefits

The deal is expected to be immediately cash flow accretive, with Chevron agreeing to pay $300 million at completion and contingent payments of up to $100 million based on production milestones. In addition, Chevron has committed to a $100 million advance payment upon execution, which will be refundable if the transaction does not close.

From an environmental perspective, the agreement enhances Woodside’s decarbonisation strategies through its expanded stake in the Angel Carbon Capture Storage Project. This initiative is pivotal for Western Australia’s ambitions to develop a multi-user carbon capture storage hub, supporting emissions reduction and enabling the energy transition.

Transaction Details

The transaction involves Woodside transferring its 13% stake in the Wheatstone Project and 65% interest in the Julimar-Brunello Project. In return, it will acquire Chevron’s 16.67% interest in the North West Shelf Project, an equal stake in the NWS Oil Project, and an additional 20% share in the Angel Carbon Capture Storage Project.

Effective from 1 January 2024, the deal is subject to regulatory approvals, third-party consents, and completion of Julimar Phase 3. This phase, currently in execution, includes a four-well tie-back to existing infrastructure. Woodside will oversee the project until its anticipated 2026 handover to Chevron.

Operational and Reserve Impact

Chevron’s contribution to the North West Shelf has averaged 54.5 kboe/d in 2024, which will significantly bolster Woodside’s LNG production. Additionally, the transaction will add a net 9.6 million barrels of oil equivalent (MMboe) to Woodside’s Proved plus Probable (2P) Reserves.

Simplified ownership of the Karratha Gas Plant, a key processing facility in the North West Shelf, will also enable improved joint venture planning for decarbonisation. The enhanced collaboration will support Woodside’s long-term ambitions for sustainability and operational efficiency.

Looking Ahead

This transformative Chevron asset swap underscores Woodside’s commitment to strengthening its position as a leader in Western Australia energy. By focusing on its operated liquefied natural gas assets and expanding its role in carbon capture storage, Woodside is aligning its portfolio with the global push for decarbonisation and cleaner energy solutions.

With the transaction expected to close in 2026, Woodside is well-positioned to unlock additional value for stakeholders, maintain strong cash flow, and drive the development of future energy projects that balance growth and sustainability.