Sonali Paul

MELBOURNE (Reuters) – Woodside (OTC): Petroleum received strong interest from several companies to acquire a stake at Scarborough, a project that it has been developing in Western Australia following the conflict in Ukraine. Chief Executive Meg O’Neill stated Friday.

Woodside, which has been approved Thursday by Woodside investors as a result of its merger to BHP Group’s Petroleum arm (NYSE:), Scarborough is now 100% owned.

Australia’s biggest independent gas producer, BHP, has long indicated it wants to reduce its stake. However BHP has been waiting for BHP to purchase its stake in order to give certainty about the sale-down.

Woodside will be the crown jewel in Scarborough. O’Neill said that it was important to find the right partner for the right price. He also suggested there might be multiple partners.

Woodside is keen to retain a majority share, however, he has not stated what percentage.

O’Neill stated that the company has received strong interest post-Ukraine as customers all over the globe realize the importance of energy security. He also indicated interest in both LNG supply, and equity in the project.

After Russia invaded Ukraine, sanctions caused an indefinite delay in the Arctic LNG 2 project. It is estimated that there are 20 million tonnes of Arctic LNG 2 each year. Investors and LNG buyers are looking for alternatives.

O’Neill stated that Scarborough is a project that “they see as one… they will be producing in second-half 2020s to fill a gap in the market that’s expected to occur at that time.”

Scarborough gas will supply Woodside with $6.3 million to fund its Pluto LNG expansion. In 2026, the first cargo of Scarborough gas is anticipated.

LNG projects usually seal long-term contracts before making an investment decision. But Woodside signed up for half its volume of LNG volumes in advance of Scarborough/Pluto’s go-ahead last Nov., positioning the company to benefit from rising prices, Wood Mackenzie analyst Dan Toleman stated.