Australian energy major Woodside has entered into a sale and purchase agreement with Global Infrastructure Partners (GIP) for the sale of a 49 per cent interest of the second train at its Pluto LNG export facility.
GIP buys 49 per cent of non-operating participating interest in the Pluto Train 2 Joint Venture.
Pluto Train 2 is a key component of the proposed Scarborough development. It includes a new LNG train and the construction of domestic gas facilities at the existing Pluto LNG onshore facility.
The estimated capital expenditure for the development of Pluto Train 2 is $5.6 billion (100 per cent project).
Moreover, the JV arrangements require GIP to fund an additional amount of approximately $835 million.
Woodside’s joint venture capital contributions will reduce accordingly. The final quantum of GIP’s capital contribution is dependent on interest rate swap and foreign exchange rates on the date of the final investment decisions for Scarborough and Pluto Train 2.
If the total capital expenditure incurred is less than US$5.6 billion, GIP will pay Woodside an additional amount equal to 49 per cent of the under-spend. In the event of a cost overrun, Woodside will fund up to US$835 million in respect of a 49 per cent share of any overrun. Delays to the expected start-up of production will result in payments by Woodside to GIP in certain circumstances.
Pluto Train 2 and Scarborough JVs will enter into anPSA, thus supporting the development of Pluto Train 2.
The transaction includes a number of other agreements including a project commitment agreement (PCA).
Subsequently, Woodside will hold a 51 per cent participating interest in the Pluto Train 2 JV and remain as operator. The effective date of the transaction is 1 October 2021 and completion will occur in January 2022