Key Highlights

  • Scarborough and Pluto Train 2 were both 99% complete at the end of September 2026, according to the third-quarter report.
  • First LNG is on track for the fourth quarter of 2026.
  • The project is reported to be on budget, with a cost of about US$12 billion.
  • Third-quarter production was 46.2 million barrels of oil equivalent, with 2026 volumes weaker than planned.

How close is Woodside's Scarborough Energy Project to delivering its first LNG cargo, and what does that mean for earnings? For Woodside Energy Group Ltd (ASX:WDS), that milestone is central because the project is the company's largest near-term source of new production after a year of weaker volumes.

The central development: Scarborough nears first LNG

Scarborough, a gas development off Western Australia whose reported cost is about US$12 billion, includes offshore facilities and a second processing train at the Pluto LNG plant. The third-quarter report says both the project and Pluto Train 2 are 99% complete, excluding modifications to existing Pluto Train 1, and that the project remains on budget. Woodside's schedule lists the first cargo in the fourth quarter of 2026. That is a company target; until a cargo is loaded, it remains an expectation.

The timing matters because 2026 volumes have been weaker. Third-quarter production was 46.2 million barrels of oil equivalent (MMboe), up 12% on the second quarter but 9% below the third quarter of 2025. Woodside narrowed 2026 production guidance to 174 to 181 MMboe, from 174 to 185 MMboe, citing lower volumes from the Beaumont New Ammonia plant, reduced output at Okha and commissioning changes. Capital Expenditure guidance of US$4.0 to 4.5 billion was maintained.

Recent results

Production fell 13% to 86.5 MMboe because of a planned turnaround and cyclone impacts. Free Cash Flow was US$352 million, gearing was 20.6%, slightly above the target range, and the Interim Dividend was 57 US cents per share fully franked, an 80% payout ratio.

The average realised price was US$84 per barrel of oil equivalent, up from US$60 in the third quarter of 2025. Capital expenditure was US$722 million, and net Debt including leases was about US$8.9 billion, with Liquidity of about US$7.8 billion. A dividend of US$1,084 million was paid in the quarter.

Business and Revenue drivers

Woodside is a Perth-headquartered energy producer with LNG, pipeline gas and oil Assets in Australia, Senegal, the Gulf of Mexico and elsewhere. Revenue depends on production volumes and realised prices for LNG, gas and crude. Operational reliability was high in the quarter: 99.8% at Pluto LNG, 99.3% at the North West Shelf and 99.2% at Sangomar in Senegal.

Realised LNG prices rose encouragingly through the year, from US$66 per Barrel of Oil Equivalent in the second quarter to US$84 in the third. The mixture of long-term contract and spot pricing means Woodside is partly, not fully, exposed to Commodity price swings. Prices are an external Factor that could reverse.

Growth portfolio beyond Scarborough

Two other major projects carry long-dated expectations. Louisiana LNG in the United States was 32% complete overall (first train 41%), on budget, with initial LNG targeted for 2029. Trion, a deepwater oil development offshore Mexico, was 71% complete with first oil targeted for 2028. The company is also selling its 70% operated interest in the Calypso gas project to BP, with completion targeted in the fourth quarter of 2026.

Woodside has scaled back its Beaumont New Ammonia Investment after a strategic review, and operations there were suspended for about 30 days in the quarter after a process safety incident.

Capital Markets Day

Woodside scheduled Capital Markets days for 5 November 2026 in Australia and 12 November in the United States. The company's disclosures cover the ASX announcement for the actual targets.

Sector and competitive position

Woodside is one of Australia's largest LNG and gas producers and competes in global LNG markets with other portfolio players and with newer United States export projects. Its strategy of adding Louisiana LNG diversifies exposure towards the Atlantic basin, while Scarborough strengthens its position in Asia. The trade-off is heavy capital spending, which reduces free cash flow during construction.

Material risks

Commissioning risk. Scarborough first LNG could slip, and early ramp-up may be slow.

Commodity and demand. Earnings depend on LNG and oil prices that can reverse quickly.

Capital intensity. Louisiana LNG and Trion require several more years of spending.

Safety and operations. The Beaumont incident and cyclone disruption show operational exposure.

Regulatory and environmental. Gas projects face approvals, climate-related policy and litigation risk.

Balance sheet. Net debt of about US$8.9 billion and a dividend policy tied to earnings require cash discipline.

What to watch next

Key dates and events are the first Scarborough LNG cargo, completion of the Calypso sale and the Browse-related asset swap in the fourth quarter, the fourth-quarter report on 28 January 2027, and the Annual Report on 23 February 2027. Together they will show whether Woodside converts its growth projects into volumes and cash on the schedule it has set.