Australian Energy Giant Woodside Sees Emissions Climb Due To BHP Purchase
Australia major Woodside Energy Group’s net equity Scope 1 emissions rose sharply in 2022 to 5.3 million tonnes CO2e from 3.5 million tonnes CO2e the prior year due to a merger with BHP Group’s petroleum arm completed in June 2022, Evaluate Energy data shows.
The merger incorporated BHP’s Australian, Gulf of Mexico and Trinidad and Tobago production units, as well as the supporting ancillary activities, into Woodside’s portfolio.
Carbon intensity fell from 0.34 to 0.29 kgCO2e/boe over the same period, reaching the lowest figure ever achieved, and suggesting the assets acquired were less carbon intense than those that Woodside was already operating.
BHP did not separate out emissions or emissions intensity data from its petroleum and mining operations pre-divestment, and Woodside did not respond to requests for data on the carbon intensity of the merged BHP assets.
But Woodside does provide data showing that the starting base emissions of the historical and merged assets were together just over six million tonnes of CO2e in 2021, and therefore there was a reduction in the overall net equity Scope 1 emissions of the existing and merged assets between 2021 and 2022 of just over 0.7 million tonnes of CO2e.
Woodside has maintained its Scope 1 and 2 emissions reduction targets of 15 per cent by 2025 and 30 per cent by 2030, but has re-established its starting base as 6.32 million tonnes of CO2e — the 2016-2020 gross annual average for the merged entity.
But the firm’s strategy relies heavily on offsets, meaning that the degree to which it plans to meet these targets through abatement is opaque. CEO Meg O’Neill told a conference last year that the firm had nearly all the offsets it needs already to achieve its 2030 target.
Woodside does have Scope 1 reduction initiatives focused on its LNG operations and says it assumes an internal long-term cost of US$80/tCO2e in the design and operation of its assets. At Pluto LNG’s Train 2 the firm has adopted aero-derivative gas turbines to achieve more efficient liquefaction, and has a goal to abate 30 per cent of the plant’s emissions by 2030. But again, progress towards this target can be supported with offsets. The firm’s Australian floating production storage and offloading (FPSO) facilities have focused their activities on reducing flare and fuel usage and delivering reliability improvements.
Woodside says it has selected around 30 decarbonization opportunities in its planning lifecycle, including: energy efficiency projects, equipment modifications, lower carbon power and process optimization.
In 2022, 67 per cent of Woodside’s equity Scope 1 greenhouse gas emissions were from fuel combustion to power its assets, 20 per cent came from venting (of which the majority is associated with removal of reservoir CO2 as part of the LNG process), and 13 per cent from flaring.
Woodside dramatically cut its water use in 2022 (see chart), and not just through reduced production. Its water intensity figure (water use vs hydrocarbon production) matched its lowest-ever levels.
The firm’s water efficiency actions are set at five-year intervals and reported on each year. These actions include regular inspections of infrastructure, as well as the ongoing identification, maintenance and repair of leaks. The next five-year review will happen in 2023.
Real-time monitoring of key indicators is used to check performance against the targets.
During 2022, Karratha Gas Plant and Pluto LNG (shown below) in Western Australia both met water efficiency targets set the previous year. Despite meeting the target, Pluto LNG experienced higher-than-expected water usage, eventually attributed to an underground leak from the site firewater system which was subsequently isolated and repaired. Further improvements in water use and efficiency are thus expected at the facility in 2023.
King Bay Supply Facility slightly exceeded its water efficiency target, but some key initiatives were implemented during the period, including the repair of leaks in the main potable water tank liners and the commissioning of a new wharf bunkering line that will reduce strain on existing high density polyethylene piping. The firm says this will result in a lower frequency of failures going forward.
In its Trinidad and Tobago oil storage facility in Guayaguayare Bay, Woodside installed a pilot ozone skid to reduce the chemical oxygen demand (COD) of the 86,000 barrels of water in its oil storage tanks, allowing the firm to successfully meet criteria to be able to discharge the water.