PERTH (miningweekly.com) – Energy major Woodside on Wednesday said that liquefied natural gas (LNG) would need to earn its place by being both low carbon and cost competitive, given the increasing focus on combating climate change.

Speaking at the Australasian Oil and Gas conference, in Perth, Woodside executive VP for development and marketing, Meg O’Neill, said that LNG producers would need to demonstrate and verify claims of being low carbon and cost competitive, as there was an increasing expectation that LNG cargoes would have their carbon content covered as part of the sale.

“We’re already working towards this. Our recent sale and purchase agreements with Uniper and RWE include opportunities to collaborate on potential carbon-neutral LNG and enhanced carbon accounting.

“Our supply chain will need to think along these lines as well, factoring in decisions on carbon as well as cost,” O’Neill told delegates.

“That’s certainly how Woodside is thinking as we prepare for a final investment decision on Scarborough and the expansion of the Pluto LNG facility, a decision which is targeted in the second half of this year.”

O’Neill noted that Scarborough was a globally competitive project that is located close to those core Asian markets and, crucially, is a resource with a low emissions intensity and very low, near zero carbon dioxide in the reservoir.

“We recognise we still need to take other actions to manage emissions and we’re doing that with our company-wide emissions strategy.

“Woodside, like many other companies in this industry, has outlined our aspiration to achieve net zero for our direct emissions by 2050. We have also in the past year identified and communicated clear near- and medium-term emissions reduction targets along that pathway.

“These targets are being applied across our portfolio and we are using a range of levers to achieve them, including deploying cutting edge technologies to ‘design out’ emissions at new facilities like Pluto Train 2 and introducing efficiencies to operations in our existing assets to limit their future emissions.

“These efforts are complemented by our investment in generating high quality offsets, including through extensive tree-planting on properties in Western Australia in partnership with Greening Australia,” O’Neill added.

Woodside in 2020 elected to delay the final investment decision at Scarborough and the Pluto Train 2, to allow project teams to extract additional value by potentially increasing the offshore capacity and optimising the development schedule.

O’Neill said on Wednesday that the company has been able to use this time to further improve the value of the development, increasing capacity by about 20% to eight million tonnes per annum of LNG, plus 15% domestic gas.

First production from the Scarborough gasfield is now targeted for 2026.