Woodside and Chevron in WA asset swap deal
The energy giants have agreed to an asset swap deal that will allow each one to focus on individual priorities.
Woodside and Chevron have agreed to an asset swap as the energy companies move to streamline and simplify ownership of key Australian assets.
The deal, which is expected to close in 2026, marks a significant shift in the energy landscape, with both companies reshaping their portfolios amid the global transition to cleaner energy sources.
Under the deal, Woodside will acquire Chevron’s interest in the North West Shelf Project, the North West Shelf Oil Project and the Angel Carbon Capture and Storage Project.
In exchange, Chevron will receive Woodside’s interest in the Wheatstone and Julimar-Brunello Projects. Chevron will also make a cash payment to Woodside of up to $US400m ($644m) – paid at key milestones and contingent on the execution and handover of the Julimar Phase 3 Project from Woodside to Chevron.
Woodside chief executive Meg O’Neill says the deal will simplify the company’s portfolio.
“The strategic and commercial rationale for this asset swap is compelling for Woodside,” she said.
“This transaction simplifies our portfolio, improving our focus and efficiency by consolidating our position in our operated LNG assets. It is immediately cash flow accretive and includes a cash payment upon both execution and completion.”
The deal will see Woodside take on greater control over the North West Shelf project at a critical juncture.
Woodside earlier this month secured a green light from the WA state environmental department for its North West Shelf Project extension, securing the future of the company’s LNG processing facility and moving the controversial $30bn Browse development one step closer.
While the decision safeguards the future of Woodside’s Karratha LNG facility, it by no means cements the $30bn Browse LNG project, backed by BP, Mitsui, Mitsubishi and PetroChina.
The same WA environmental department earlier this year indicated it opposed the Browse department, and that it posed an “unacceptable risk”.
The agreement, which remains subject to regulatory approvals, also fulfils a long-held plan for Chevron. The US energy giant in 2022 explored a sale of its 16.67 per cent stake in the Woodside’s majority owned and operated North West Shelf LNG business but elected not to proceed after not attracting a price it was looking for.
Chevron is also handing over a 20 per cent interest in the Angel CCS project.
Mark Hatfield, managing director of Chevron Australia, said the deal will allow it to focus its attention on a key asset.
“This transaction will enable us to consolidate our focus and resources on key assets we operate in Western Australia, in this case our Wheatstone Project,” he said.
“The North West Shelf Project paved the way for Western Australia and the nation to become international leaders in natural gas and has been operated by Woodside to a world-class standard.”
Chevon will secure Woodside’s 13 per cent stake in Wheatstone Project and 65 per cent operating in the Julimar-Brunello project.
The announcement of the deal comes just a day after U.S. oil giant Chevron said it had struck a deal to supply a total of 130PJ of gas to aluminium producer Alcoa over a 10-year period starting 2028.
The gas will be supplied from Chevron’s 530 terajoules-a-day Gorgon and Wheatstone facilities, and North West Shelf Venture in the state of Western Australia, Chevron said.
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