Woodside nears Scarborough LNG start after production rebound

Production rebound lifts third-quarter revenue

Woodside Energy Group Ltd (ASX:WDS; NYSE:WDS) returned to higher production in the third quarter, with output climbing 12% from the previous quarter to 46.2 million barrels of oil equivalent. Operating revenue rose 2% to US$4.281 billion, as stronger LNG performance offset lower average realised pricing across the liquids portfolio.

The production recovery largely reflected Pluto LNG, where volumes improved after turnaround and maintenance work in the second quarter. Woodside reported quarterly operating reliability above 99% at Sangomar, the North West Shelf Project LNG and Pluto LNG, while LNG realised pricing rose to US$84 per boe, up 27% from the second quarter. The broader average realised price was US$84 per boe, compared with US$85 per boe in the previous quarter and US$60 per boe a year earlier.

The result extends a year of operational improvement after the company’s Scarborough progress in H1 2026, when the project was reported as 98% complete. Woodside’s full-year production guidance has nevertheless been narrowed from 174-185 MMboe to 174-181 MMboe, partly because Beaumont New Ammonia guidance was reduced to 1.5-2.5 MMboe from 2-3 MMboe.

Scarborough enters final commissioning phase

The Scarborough Energy Project and Pluto Train 2 were 99% complete at 30 September, with first LNG cargo still targeted for the fourth quarter of 2026. Woodside said gas from the Scarborough reservoir had been introduced into the floating production unit and exported into the trunkline, while Scarborough gas subsequently reached the warm end of the Pluto LNG train.

Mechanical runs of the Pluto Train 2 compressors have been completed, with work continuing in the cold end before liquefaction can begin. Modifications to Pluto Train 1, required to process Scarborough gas, are also progressing. The project remains on budget, but the final commissioning sequence leaves timing and start-up execution as the immediate operational test.

Growth portfolio advances while ammonia strategy changes

Trion was 71% complete at quarter end and remains on budget, with floating production unit fabrication at 96% and first oil targeted for 2028. Louisiana LNG was 32% complete, including 41% for Train 1, and continues to target first LNG in 2029. Woodside said structural steel supply challenges linked to disruptions in the Middle East were being mitigated through alternative logistics and fabrication sources.

The portfolio is also becoming more selective. Woodside has agreed to sell its 70% operated interest in the Calypso Project to bp, with completion targeted for the fourth quarter after key conditions precedent were met. Separately, following a strategic review, it will begin a formal process to reduce its investment in Beaumont New Ammonia as the lower-carbon ammonia market develops more slowly than expected.

Safety events and balance-sheet commitments remain in view

Beaumont New Ammonia was shut for about 30 days after a Tier 1 process safety event and operated at 69% of nameplate capacity during the quarter because of the shutdown and third-party feedstock constraints. Woodside said there were no injuries, equipment damage or lasting environmental impact, but the event was one of three process safety incidents recorded across the quarter.

Woodside ended September with approximately US$7.8 billion of liquidity and net debt, including lease liabilities, of about US$8.9 billion. It paid a fully franked dividend of US$1.084 billion during the quarter and maintained full-year capital expenditure guidance of US$4.0 billion to US$4.5 billion. The next major strategic marker is the company’s 5 November Capital Markets Day, where project execution, portfolio pruning and the targeted US$350 million reduction in recurring costs from 2028 will face closer scrutiny.