Page 5 - AsiaElec Week 50 2021

AsiaElec COMMENTARY AsiaElec

the development of Scarborough and the Pluto
expansion as a game-changer for Woodside.
The company’s operations in Myanmar were
missing from its outline of the merged entity’s company said, starting small but with the poten-
portfolio of assets, meanwhile. O’Neill said all tial to be scaled up if demand allows it.
of Woodside’s business decisions in Myanmar Meanwhile, Woodside is also working with
were under review following a military coup in BP, Mitsui & Co. and Mitsubishi to study the
the country in February. feasibility of CCS at a depleted gas field offshore
Western Australia.
Cleaning up
At the same time, though, Woodside is trying What next?
to step up its investments in cleaner energy. In Woodside’s entry barriers for new energy devel-
particular, the company believes that investing opments are lower than those for new oil and gas
in hydrogen projects and carbon capture and projects. The company is targeting an internal
storage (CCS) is the best way to leverage its oil rate of return (IRR) of more than 10% and pay-
and gas expertise and maintain returns to share- back within 10 years from new energy projects.
holders as the energy transition picks up pace. At the same time, it is targeting an IRR of more
The US project it announced this week than 12% and payback within seven years from
involves the production of green hydrogen – new gas projects, and an IRR of above 15% with
which uses electrolysis and renewable energy – payback within five years for oil developments.
from a site in Oklahoma. Woodside has entered The gas projects it is targeting include both
into a memorandum of understanding (MoU) pipelines and new LNG developments, with the
with Hyzon Motors to develop the project, company saying it would leverage existing infra-
which is known as H2OK. As well as securing a structure to monetise undeveloped gas. This
lease and option to purchase land in Oklahoma includes optionality for hydrogen, according to
to underpin the project, Woodside said it was this week’s presentation.
“progressing similar land acquisition opportu- The $5bn investment target for new energy
nities aligned to growth markets in the US”. would need to be revisited, however, if the
As well as H2OK, Woodside is also devel- merger with BHP’s oil and gas business falls
oping two projects in Australia – H2Perth and through.
H2TAS – that would produce ammonia from “But again, we have full confidence that our
hydrogen for export. shareholders will support the merger,” O’Neill
These projects are designed to be phased, the told analysts during this week’s presentation.™

Week 50 15•December•2021 www. NEWSBASE .com P5