Woodside Energy is nearing the start of operations at its $16-billion Scarborough gas project, on track for the second half of this year, after achieving record production in 2025.
he Australian gas major reached a significant milestone in January after the 70,000-tonne floating production unit (FPU) was towed 4,000 nautical miles and arrived at the remote gas field in the Carnarvon Basin, 400 kilometres offshore Western Australia.
Described as one of the largest semi-submersible facilities ever constructed, the FPU has a height of 165 metres from its keel to its top (equivalent to a 50-storey tower) and has living facilities for a crew of 75.
The floating plant will process gas at the field before piping it to Woodside’s expanded Pluto LNG facility at Karratha for liquefaction and export.
Liz Westcott, Woodside’s Acting Chief Executive Officer, celebrated the arrival and the project’s progress, which was 94 per cent complete as of the end of 2025.
Westcott said: “Having the FPU, an integral component of the Scarborough energy project, safely in the field is a momentous way to begin 2026.
“Its successful arrival is a further demonstration of the Woodside, McDermott and subcontractor teams’ collaboration and commitment to safe delivery of the project.”
The FPU departed China – where it was built – in November, towed by four large ocean vessels at a speed of just four knots, approximately 7.5 kilometres per hour (slightly faster than the average human walking speed).
The arrival of the FPU mitigates the risks associated with delivering the first LNG cargo, which is expected in the fourth quarter of 2026. However, cost control and timing updates in the forthcoming quarterly report remain critical, and exposure to commodity prices continues to be the largest ongoing risk.
The Scarborough project will operate eight initial production wells at water depths ranging from 900 to 950 metres, with a total of 13 wells to be drilled over the field’s lifespan to support an annual production of approximately eight million tonnes of LNG.
A key element of the Scarborough project is the expansion of Woodside’s Pluto LNG facility in Karratha, with the commissioning of a second LNG train.
The Scarborough Energy Project – Pluto Train 2.
Photo courtesy of Woodside Energy Ltd.
Since February 2024, a total of 51 modules, weighing a combined 56,000 tonnes, have been shipped to Karratha from a module yard in Indonesia and installed on site.
Engineering, procurement, and construction of the second Pluto Train were undertaken by Bechtel, commencing at the Karratha site in August 2022.
In October 2024, Woodside completed the installation of a 433-kilometre trunk line connecting the second Pluto train to the Scarborough gas field.
Woodside said expanding the Pluto facility to include a second LNG processing train offers an efficient method for processing gas from the offshore Scarborough field.
About five million tonnes of gas is expected to be processed every year through the new LNG train, while up to three million tonnes per annum will be processed through the existing Pluto train.
In January, Westcott said: “At the start of 2025, the FPU hull and topsides were being constructed in separate yards [and] since then have been integrated into a single unit and delivered into Australian waters, with work on securing the mooring lines underway.
“Our focus now shifts to the hook-up and commissioning phase in preparation for production, and ultimately, first LNG cargo, which is on track for the second half of this year.”
Woodside is upgrading the existing Pluto LNG train through modifications to the facility and associated infrastructure to achieve the intended production capacity of three million tonnes per annum.
LOCAL CONTENT AND EFFICIENT ENERGY
Gas from Scarborough exhibits low naturally occurring carbon dioxide concentrations of less than 0.1 per cent of the reservoir’s composition, positioning it as a clean natural gas and providing a competitive advantage in increasingly carbon-conscious energy markets.
An important facet of Woodside’s project execution for Scarborough is its recognition of the critical role local content plays in maximising the benefits of a given project, with more than $3.6 billion in work contracts awarded to WA companies.
As of June 2024, Woodside had engaged more than 300 businesses in WA, including more than 85 businesses in Karratha, while more than 30 contracts were awarded to Indigenous businesses by Bechtel or its subcontractors.
GUIDANCE LOWERED AFTER RECORD PRODUCTION IN 2025
Woodside Energy has lowered its production guidance for 2026 to between 172 and 186 million barrels of oil equivalent, following record annual production of 198.8 million barrels in 2025.
The more cautious outlook stems from planned downtime in the June quarter at the Pluto LNG facility in preparation for processing Scarborough gas.
Production for the recent December quarter was just shy of 49 million barrels, down 4 per cent from the previous quarter due to seasonal impacts and lower demand from the east coast.
This year’s production will be supported by initial output from Woodside’s new Beaumont ammonia project in Texas, which is expected to account for between two and three million barrels of oil equivalent.
Wescott attributed the company’s strong 2025 performance to sustained plateau production at Sangomar through late October and Pluto LNG operating at 100 per cent reliability for the second half of the year.
Capital expenditure in 2026 is expected to reach between $US4 billion and $US4.5 billion, lower than the consensus forecast.
A quarter of capex is earmarked for the Louisiana LNG project, where construction is 22 per cent complete and scheduled to start in 2029.
Woodside finalised a deal with US pipeline company Williams in the December quarter for Louisiana LNG and is actively seeking to onboard additional partners for the project.
Finance and investment firm Morningstar said in a February note that its 2025 earnings per share for Woodside were steady at US$1.28, but it sharply reduced its 2026 earnings per share forecast by 46 per cent to US$0.65.
The onshore Pluto LNG Plant. Photo courtesy of Woodside Energy Ltd.
Morningstar said the drivers included reduced near-term production, softened energy commodity futures since its last note, lowered midterm production at the North West Shelf JV, and the slightly value-destructive sale of Angostura in Trinidad and Tobago.
It added: “We still think the market is overly bearish – the energy transition casts a pall over the outlook for hydrocarbon demand.
“But significant investment is required in most demand scenarios to backfill naturally declining supply – progress on growth projects is also supportive.
“We remain optimistic about the outlook for natural gas during the energy transition.
“Woodside retains a high-quality asset base, geographically advantaged to meet growing LNG demand in Asia.
“Scarborough/Pluto train two represents strong long-term production, and Louisiana LNG will add volumes.”
Woodside is also advancing a succession plan – described by Chairman Richard Goyder as in “good shape” – after former Chief Executive Officer Meg O’Neill’s resignation with immediate effect in December.
Several internal candidates are being considered for the role, and external contenders are being scouted.
Potential internal candidates include Chief Commercial Officer Mark Abbotsford, Chief Operating Officer International Daniel Kalms, as well as Westcott, the former Chief Operating Officer.
In its December quarterly report, Westcott reaffirmed the company was continuing to execute the strategy it outlined to investors in November.
Westcott said: “The executive team and I remain focused on safely delivering our operations and projects while maintaining rigorous cost management during the Chief Executive transition period.”
Woodside is the operator of the Scarborough project and majority owner of the gas field, with a 74.9 per cent interest in the field. Joint venture partners LNG Japan and JERA hold 10 per cent and 15.1 per cent interests, respectively.
Woodside is also the operator of Pluto and the majority owner of the second Pluto Train, holding a 51 per cent participating interest, while the remaining 49 per cent non-operating participating interest is held by Global Infrastructure Partners.