Woodside, page-4212

Liz Westcott -

Executive Vice President and Chief Operating Officer Australia

Woodside Energy Ltd.

Speech to the Australian Domestic Gas Outlook Sheraton Grand Sydney Hyde Park Wednesday 2 April 2025

[Check against delivery]

Good morning and thank you Clyde for the warm welcome.

I'd also like to thank everyone who's come to listen, including distinguished guests.

And I acknowledge the traditional custodians of this land, the Gadigal People of the Eora Nation and pay my respects to their Elders past and present.

I'm new to this forum, so before I get into my speech, I'd like to tell you a little bit about my background.

I'm from Melbourne and I'm a civil engineer by trade.

I've worked in the electricity generation sector, as well as oil and gas.

I've lived in Italy and the UK and two years ago, I moved to Perth to take on the role of Chief Operating Officer at Woodside.

If someone asked me what language I speak, I would say I am bilingual and by that I mean I am now fluent in West Australian!

If you've been to Perth and someone's asked you to order them a long mac topped up at the coffee shop, you'll know what I mean.

But in all seriousness, as I sat down to think about what I'd share on this topic today, the very clear thought that struck me was, there is much those of us from "over east," as they like to say in Perth, can admire about the west.

To start with, Western Australians know their state government believes gas is good.

Until the recent state election, WA cabinet minister Reece Whitby held the energy portfolio and he said those three words, gas is good, in inverted commas.

Minister Whitby and indeed other WA Ministers when asked, have consistently made it clear the WA

Government sees gas as a transition fuel that can provide reliable back-up power for renewables-led grids.

This is because, the WA Premier Roger Cook has for some time now very publicly backed companies like ours exporting gas to Asia because it's a lower-emissions alternative to coal-fired power.

But this pro-gas sentiment is not new in WA.

In the 1970s then Liberal Premier Sir Charles Court played an instrumental role in establishing the North West Shelf Project.

Backing an export-facing project of its magnitude created the economy of scale that has provided

Western Australian households and businesses affordable and reliable gas for more than four decades.

Fast forward to this century and the practical and flexible application of WA's 15 per cent reservation policy has allowed even more domestic gas to flow, including facilitating development of new supply.

In 2024 production from Woodside's WA assets represented approximately 21 per cent of the state's domestic supply.

As we look to the future, the Scarborough Energy Project is on track for first LNG cargo in the second half of 2026.

Like its predecessors, this project is also set to make a significant contribution to supplying domestic customers.

To summarise my point, WA Governments of both political persuasions have constructively collaborated with our industry for decades and they have secured reliable, affordable gas for the people of WA.

This does not mean WA is set for eternity.

As we know, gas is a non-renewable resource.

Without the development of new gas projects, the Australian Energy Market Operator forecasts WA is at risk of a supply gap in 2028 and faces supply deficits from 2030.

As you may be aware, we are in an approvals process for ongoing operations for the North West Shelf beyond 2030.

That approval is important for the thousands of direct and indirect jobs that rely on North West Shelf gas, for the billions of dollars in taxes and royalties that it will contribute and for secure gas supply to Western Australia.

The North West Shelf is a nationally significant asset that can continue to be a foundation stone for the WA domgas market well into the 2030s.

We need to be unlocking all of our gas potential in Australia whether on the east or west coast to create jobs, boost productivity and put downward pressure on the cost of living.

We look forward to certainty for all those who rely on the North West Shelf.

So that's the state of play in Western Australia, where we have the resources and infrastructure and policy settings to support domestic supply.

All we need is certainty around ongoing operations.

Over in the east, there's a different history and, at a federal level, both major parties are looking for solutions to avoid looming shortfalls.

The fact our industry is now firmly in the political spotlight just shows that what we do matters to the daily lives of Australians.

Like it or not, what we do is essential to the standard of living here in Australia.

In the eastern states, as in Western Australia, there was initially a collaborative approach between industry and government.

In the 1950s, then Liberal Prime Minister Sir Robert Menzies was encouraging petroleum exploration through a subsidy scheme.

In 1965 BHP and Esso delivered the news he'd been hoping for, announcing they had discovered oil in Bass Strait.

Today, Bass Strait remains an important supplier of energy to eastern Australia and Woodside holds significant interests in the Gippsland and Kipper Joint Ventures.

In 2024 Woodside's share of Bass Strait production represented approximately 17 per cent of all gas supplied to the east coast market.

Every molecule of natural gas Woodside supplies from Bass Strait is sold into the Australian domestic market for local manufacturers, power generators and homes.

We are proud of this contribution.

And I'm pleased to highlight our recent investments in the development of new supply.

In February Woodside, Esso and Mitsui announced we would invest nearly A$200 million in the Kipper 1B Project which will bring on much-needed additional gas supply from the Gippsland Basin.

And last month Woodside and Esso announced the A$350 million Turrum Phase 3 Project would deliver gas to south-eastern Australia ahead of winter 2027.

In fact, when this project comes online, it would supply four times more gas than Queensland supplied to the southern states in 2024.

Woodside is committed to supplying as much gas as we can to the market through projects like these.

But as AEMO forecast in its most recent gas statement of opportunities, the Bass Strait reserves are declining and unless new supply is secured, the east coast gas market is at risk of peak day shortfalls from 2028 and structural supply gaps from 2029 in southern Australia.

This consistently gloomy outlook has recently seen the Victorian Government calling for market-led solutions to this problem.

On the one hand, we are pleased the Victorian Government is acknowledging eastern Australia needs gas.

Indeed, across Australia I think it's fair to say we've seen growing public awareness of the need for new supply.

But we must consider the historical context.

And that context is that we have seen market interference by successive Victorian governments, dating back as far as 2012.

This interference has included bans on installing gas connections in new homes and a now reversed ban on conventional onshore gas exploration.

These actions have understandably left our industry unclear on where we stand in Victoria.

If there is to be any investment in new supply in Victoria, government would need to be prepared to make the case for it.

What is needed now is policies that are consistent with investment certainty and can keep Australia competitive and bring on new supply.

In saying this, I believe energy companies like ours should be big enough to block out political to-ing and fro-ing and focus on finding the solutions needed to meet society's energy needs.

This is why we have teams at Woodside doing the hard work needed to consider how, and if, we could support LNG import terminals on the east coast of Australia.

But it is worth noting that liquefying and then regasifying our product adds to the cost of delivery.

And to be successful, an import terminal market would need a set of clear and practical rules to operate under.

I say this, because in our recent experience complying with the Federal Government's Gas Code, our administrative burden has gone up and we are less able to respond flexibly to the needs of buyers.

Now I've talked a lot so far about energy security solutions.

But at Woodside we are also focused on decarbonisation, here in Australia and overseas.

Our climate strategy contains two key elements, reducing our net equity Scope 1 and 2 greenhouse gas emissions and investing in products and services for the energy transition.

We are making progress on the first element by pursuing emissions reduction opportunities at our assets and continuing to develop our carbon credit portfolio.

A practical example of our pursuit of emissions reduction opportunities is the work we have done to optimise and modify our Karratha Gas Plant boil off gas compressors.

This has resulted in a reduction of roughly 15-hundred tonnes per annum of methane emissions.

This is a significant amount, noting methane's global warming potential.

If we look at it in terms of carbon dioxide equivalency over a 20-year timeframe, it would amount to 126,000 tonnes per annum of carbon dioxide.

On the second element, last year, we made our largest investment in new energy to date - the US$2.35 billion Beaumont New Ammonia Project in Texas.

First ammonia production is targeted for the second half of this year with lower carbon ammonia targeted for the second half of 2026, when carbon sequestration comes online.

Closer to home, in WA, Woodside plans to supply energy to a pilot project aimed at using iron ore to make lower-carbon steel.

We made this announcement in December, alongside BlueScope, BHP and Rio Tinto.

These companies have formed a collaboration called NeoSmelt.

Initially natural gas would be the energy source, but once operational, the project aims to use lower-carbon emissions hydrogen.

Something I would like to underline, is that while Woodside is working to develop hydrogen and ammonia, there is a product we are already producing that can play an important role in decarbonisation.

And that product is gas.

It may seem strange that I am saying this to a gas conference but I think it's something that often gets lost in debate.

The point I am making is illustrated well if we look to Asia.

Because it's estimated that if just 20 per cent of Asia's coal-fired power stations switched to gas, it would reduce carbon emissions by 680 million tonnes a year.

That's more than one and a half times Australia's total annual net greenhouse gas emissions.

At Woodside, we talk about getting the biggest bang for buck.

If you ask me, that's pretty good decarbonisation bang for buck.

I touched on this briefly in my introduction but for a local example of the role gas can play in the energy transition I'm going to again highlight WA.

WA's state-owned coal power stations in Collie are set to be retired in the next five years.

The State Government is making big investments in battery storage so more renewables can come into the grid.

But the Premier Roger Cook is happy to say WA is predicted to need gas power generation into the 2040s.

Gas has long been called a transition fuel.

I say it's a fuel that can support the challenge of decarbonisation.

I am proud of the work our teams are doing to meet this challenge and the challenge of ensuring our customers have access to reliable, affordable energy.

My ask of our policymakers is to join us in explaining the role our industry plays and help us build community support, so we can continue this important work.