Good morning, everyone and thanks for joining us. As you will have seen this morning, we released our 2019 full year report and results briefing pack to the ASX. With me on today’s call is our Chief Financial Officer, Sherry Duhe. As we have done in previous years, we will make some introductory remarks before opening the call up to a question-and-answer session on the full year results. Of course, please note the standard disclaimers and important notices on Slide 2 and a quick reminder that this presentation does include some forward-looking statements and that our reported numbers are all in U.S. dollars unless otherwise noted. In the past year, we faced a range of challenges, including tough trading conditions, complex commercial negotiations and cyclone activity. Despite this, we have still achieved significant progress in our growth plans and delivered solid financial results. Let’s start by running through our key financial and business outcomes, starting on Slide 3. You can see our reported net profit after tax is $343 million and our underlying profit is $1.063 billion. Revenue and operating cash flow were strong underscoring the capacity of our base business to support growth. We’ve delivered a fully franked dividend for the year of $0.91 per share. The reported profit reflects the decision to impair the value of our Kitimat LNG asset in Canada. And disappointingly, depressed market conditions have persisted in Western Canada, where gas trades at a substantial discount to Henry Hub prices in the U.S. We have reviewed the developing concept and are looking at the most capital efficient way to source gas for the LNG facility and timing of the development. We still believe it to be an excellent opportunity and we will continue to include it in our plans. The Woodside team has done a…

Thank you, Peter and good morning everyone. The financial headlines, as shown on Slide 11, reflect the strength of our base business and the work we have done throughout 2019 to prepare for the delivery of our growth plans. Peter has already discussed our underlying net profit after-tax of $1.063 billion. We finished the year with over $4 billion cash on hand, low gearing and very strong liquidity. As we look at the capital expenditure required over the coming years, we have focused on maintaining a strong financial position to ensure we have a buffer against market fluctuations. We are targeting to retain sufficient liquidity to cover 12 to 18 months of commitment through our growth phase. Slide 12 shows a breakdown of the main factors impacting our profit for the year. Commodity price was of course a key driver reflecting a 7% decline in portfolio realized price compared to 2018. We incurred additional impacts from the full year application of a new leasing accounting standard and changes to our LNG processing agreements and our depreciation costs increased with the completion of our Greater Enfield oil project and a full year of operation from Wheatstone LNG Train 2. These expenses were offset by a 45% reduction in exploration spend and our continued disciplined management of production costs. Finally, our reported profit was impacted by the Kitimat impairment, but of course this does not affect our cash position nor the full year dividend. Our production cost performance is shown on Slide 13. Production costs were $505 million, which is equivalent to $5.7 per BOE across the entire portfolio. This is higher than previous years, but does include the one-off cost and the production impact of the planned major Pluto LNG turnaround. Adjusting these metrics for the increased cost and reduced production…

Okay, thanks, Sherry. Look, in summary, I want to discuss our current position in the energy market and provide a 2020 look ahead across our business, so I am sure you’ll be very interested. On Slide 20, as expected, trading conditions were difficult during 2019, we anticipate more of the same in 2020 as new production enters the market and demand works to soak it up. Nevertheless, the fundamentals remain strong and we are confident the market will tighten as we see more coal-to-gas switching in key markets and the stock prices stimulate demand growth. We are in a very competitive landscape and it’s important that we maintain momentum on our projects. The reality is that the cost of services is likely to increase as demand picks up and that’s why we have moved early to lock in costs at the low point of the cycle. Finally, on Slide 21, we have another busy year ahead as we maintain a strong base business and progress our growth plans. We are building the resilience of our company through an increased focus on sustainability, including expanding our offset business and continuing to explore new energy options. You have heard me talk for a few years now about our vision for the Burrup Hub, and you can see on Slide 22 that it is in some ways a simple equation. We are bringing together Woodside-operated resources and assets in a capital efficient way to produce natural gas to meet global demand. And it really does make a lot of sense and we have been working hard to achieve our vision and unlock value for shareholders. We are not sugarcoating the task that lies ahead. We’ve come through a challenging year and we know that there is more to come, but we are ready for it. It’s worth remembering that 2019 marked 30 years of LNG exports from the North West Shelf. The path we’re on now sets us up for another 30 years. Finally, I want to comment briefly on the coronavirus or COVID-19 as it’s now being named. We’ve experienced no impact on LNG shipments. We expect softer prices for spot cargoes as Chinese LNG demand softens, but the market will rebound when the situation improves. Our financial exposure is limited, as the majority of our portfolio is sold on long-term contracts, with spot sales accounting for approximately 15% to 20% of total sales. In the mid-term, as we move into project execution for our growth plans, there is potential impact on fabrication yards, but that is still some months away, and we continue to monitor the situation and plan accordingly. Now that concludes our opening remarks. Thanks very much for listening, and we’ll now open up for questions.

[Operator Instructions] Our first question comes from Saul Kavonic from Credit Suisse. Please go ahead.

Hi. A few questions if I may. First one just on Browse timing, it seems to be talking about late 2021 FID, which seems a delay on prior guidance. Could you give some color on the reason for that apparent delay? And can you also provide some color on what the plans in terms of level of advancement of getting gas into the North West Shelf prior to Browse now that Browse seems to be pushing back further?

Thanks, Saul. Look, on the Browse and if we can, we’ll limit your questions to two or three and we’ll just make sure we get through everybody. Just on Browse timing, we’ve talked about late 2021. Since we last spoke to you, the Browse team has updated or has benchmarked the amount of time required to go through the FEED activities based on the complexity of the offshore facilities. And to put it into context, the top size for the offshore facilities are around about 45,000 tons which puts them into the top decile of complexity on a global scale. Not as complex as FLNG, but certainly as complex as some of the larger FPSO facilities that you will see around the world. So that IPA benchmarking recommended that the FEED period, which is, as we know, that’s where we make or lose value in these projects is through that early engineering. But that FEED period will be extended by a few months. We are also recognizing that the commercial negotiations are still not complete. We are down to the last three or four value items, but it’s difficult for me to predict when that will actually be closed at the moment. So also we are just – we are taking an approach here that’s just saying the commercial negotiations will get completed when they are ready. It’s not something that we can force. It’s not something that we have control over given the multiple parties that are involved in those negotiations. But I can say to you, we have made some good progress over the last – since Investor Briefing Day, but we are down to the last three or four significant items to close out.

Thanks Peter. My second question is regarding the sell-down of Scarborough, which is previously being spoken about and the timing of that. I just want to get an indication for the sale of the integrated sell-down you talked about Scarborough and Train 2. Is that something you foresee could occur prior to the BHP final tolling agreement being signed or is that something that’s only likely to occur after that point in time?

No. And actually, Saul, I will come back and finish your first question if I can. You asked about the North West Shelf facilities.

Yes, apologies.

No, my apologies, I forgot. The North West Shelf facilities, as we mentioned, we have approved building the interconnector between Pluto and North West Shelf, the North West Shelf. The North West Shelf venture yet to approve the receiving facilities on their side, but we expect that shortly and the pipeline right of way and survey activities have already commenced on that connector. With respect to gas going through it, North West Shelf is in discussions already with multiple parties who are wishing to put gas into the facility either through the interconnector, which would be obviously Woodside-operated resources, or separately into the plant. And so we’re hopeful that we’re not going to see a lot of LNG in North West Shelf. The only issue that we would see is just the composition of the gas, the multiple compositions and whether the capacity of the plant will be affected in any way by that composition change. So we don’t see a big gap, Saul, with any delay in Browse at this point. However, it does get to a point where the LNG North West Shelf gets larger than these multiple sources of gas can service. So we can’t wait forever, but at least in the short term, that LNG is taken up. Now back to Scarborough and Train 2, on the sell-down part of it, we’ve opened a data room this week, so it’s very timely for Scarborough with respect to the – and we expect that process to complete around the middle of the year. We don’t expect any binding agreements to be completed by then, but we expect certainly a line of sight to a potential sell-down. Now we are going out into the market, to be honest, in what I would call difficult conditions given the sentiment at the moment around coronavirus, the oversupply in the market and so forth. So it’s just one of those points in time where we’ve always been very clear with shareholders. We won’t sell just simply to sell because this really is a tremendous asset. And if we are not getting full value, then we will hold on to the asset and work our way through that and potentially sell it another time. With respect to the timing with BHP agreements, we expect to complete the toll agreement in the next couple of months and have a binding toll agreement with BHP in the next couple of months with a view that we will be able to go to full FID on Scarborough sometime around the middle of this year.

Thanks. One quick last one if I may. Just on the Phase 2 FID of Julimar-Brunello can you probably will give some color on how the reservoir is performing and is the timing of this Phase 2 earlier than you expected compared to expectations when you bought into Wheatstone?

No, timing of Phase 2 is as expected and the overall recovery from Julimar-Brunello is per our acquisition expectations. There has been some movement as you might guess, because there are multiple reservoirs involved. As you look at each different reservoirs there is pluses and minuses at each different reservoir, but no, the overall it is pretty much the same. We are dealing with some issues around mercury, but that’s designed into Julimar Phase 2 and in the funding for Julimar Phase 2, but other than encountering some mercury and having to put into facilities to deal with that, everything else is per expectation.

Thanks very much, Peter. Appreciate it.

Thanks, Saul.

Our next question comes from Mark Samter from MST. Please go ahead.

Good morning. Just a couple of questions if I can. We have always talked about the Uniper contract and we are allocating that to Scarborough in our mind. But I guess, there is no more of the North West Shelf contracts rolling off as you go through the next couple of years. Could you give us a feel for how much capacity assuming Scarborough goes ahead? How much volume you think is un-contracted in 2025, because I guess we can allocate it to one project or the other, but just kind of Woodside in its totality perspective, I guess is how you look at it?

Yes. Look, it’s a good question, Mark, but we haven’t provided any guidance to the market. So Damien is looking at me shaking his head here at the moment. So alright, Damien, but you are right there are number of the legacy North West Shelf contracts rolling off. We expect to renew those contracts with the existing buyers, but obviously, they will be under different terms to what we have historically had. I will give some guidance later in the year at IPD around the percentage of total volume that that represents out in 2025, but I don’t want to do it on the call because we haven’t provided that guidance. Equally as you know, the Scarborough – we have got Pluto price negotiations underway at the moment. We are still confident, feel comfortable with the guidance that we provided at Investor Briefing Day around the pricing outcomes that we expect from that. And then, of course, Scarborough – marketing for Scarborough has been going well. We were targeting at least to get 50% or more of the volumes way contracted by the time we go to FID. We still have a line of sight to that, but I would say to you some of that work is being done with customers who maybe affected or who are affected by the coronavirus. And so finalization of some of that marketing, with respect to making it binding, is being delayed at the moment through the inability of being able to meet with those buyers. So we are watching this one closely, Mark and working out how we can finalize those negotiations remotely rather than face to face, but it’s fair to say our buyers at the moment, particularly Asian buyers are very, very limited in their ability to travel indeed.

I might squeeze in two more quick questions if I can. First, really quick on Corpus Christi, I am – just listening to what you said today about it. Unless I am wrong, you didn’t kind of have the ability to pay and not take, is that an option that you consider or that you have the ability to pay and not take if you wanted then?

Yes, we do under that contract. So we just have – we have an ability to pay the processing fee simply and not take the volumes. And of course we watch the volumes very closely as to whether they are in the money or not. So this is simply – if you consider the processing fees on cost and then what’s the marginal price that you are receiving for the trading volume. So, I think we need to put it into context between a third and a half of those volumes have already been put away into contracts. It’s already contracted for this year. And so we are exposed to the remainder of that this year and we are watching those trading conditions very closely. Sherry mentioned that we will also look at hedging through this process. So, we have approval from our board to go into limited hedging programs should we see opportunities in the market with those volumes and other volumes as we move forward, so no, not a great time for us to be starting with Corpus volumes coming in. We have got to start to nominate in March what we are going to do with those volumes. You should get a signal from others in the market sometime here through February, because we understand others under their contracts are required to make commitments in late February. And for us, it’s kind of in that late March timeframe. So I would watch this space very closely at the moment. Some are going to take the opportunity to trade through this. We will have to consider our position as to whether we pick it up or not.

And I guess talking about spot prices and where they are and I completely get that spot discussions in Scarborough a very long-term contract, but do you have any concerns that the BHP Board, I presume the board has to sign up on the binding tolling agreements and FOB, Pluto spot price at the moment, about $2.50 and the toll you told us is above $3. Even just psychologically, I mean, do you have any concerns with the current environment, makes that a hard decision for them or?

Look, it’s difficult for me to talk for the BHP Board as you know, because I am not sitting in those conversations. So I would go back to the basics. I mean, BHP is a very sophisticated company and understands the long-term nature of commodities. So I guess I am confident that they can see through short-term perturbations in the market, but there is a reality. It does drive sentiment. It’s always nicer to do those things when price is high rather than price being low in the spot market. But I would say to you, we’ve been predicting that 2020, 2021, which is difficult in the spot market for the last couple of years, just simply because of the new volume coming in from the U.S. and Russia, in particular. And you hope these things don’t play out, but you’re prepared for them. And as it’s turned out, it’s also coincided with warm weather conditions in Europe, high tank level – or high storage levels in Europe. And now the coronavirus, which has impacted manufacturing demand in China. So we forecast a condition and then these other existential things have come over the top and are leading to prices, so sub-$3 in the marketplace at the moment. So we have always got to be positive about those things, and the coronavirus will hopefully be past us soon. And then some of these other conditions will start to work in our favor as we move through the back end of 2021 into 2022.

Okay, great. Thanks.

Thanks Mark.

Our next question comes from James Byrne from Citi. Please go ahead.

Good morning, Peter and Sherry. I have a question on the balance sheet. As you are both probably aware, we have been a little bit cautious here on what the balance sheet may look like if you are unable to sell assets, particularly Scarborough and Pluto, by the time you take FID on those projects. And I think that view was somewhat we indicated by your credit rating agency releasing a report in December that said that their forecast for your credit metrics actually turn negative in that scenario? So I wanted to understand a little bit about that scenario where you don’t see the prices you would otherwise want in the sales process, you take an FID at your current working interest. What’s your plan B there around the balance sheet? And I appreciate that, that’s probably an open-ended question because it might depend upon the prevailing share price as to whether you want to raise equity or not. But aside from that raising equity, Sherry, I picked up on your comments about reviewing the dividend payout ratio, and I think that equity markets view that payout ratio of 80% as sacrosanct. Is that not the case?

So James, let me have a go at that first and then Sherry will jump in. Firstly, on the balance sheet, if you go back 2 years, when we first acquired Scarborough, we raised equity. And at the time, we came under some criticism for doing that. But we said we wanted to ensure that we, one, maintained our credit rating, and at that time, we had advise from the credit agencies that they would have put us on a negative watch or actually immediately downgraded us on that acquisition, so that’s why we raised it. At the same time, we said we did that because we want to make sure we can progress our growth projects because the commodity business is cyclical. And as things invariably pan out for you, the time when you’re getting ready to make a big decision, there will be a perturbation in the market and the price signals won’t be working in your favor. It’s rare that the price signals work in your favor. So I think as you look at the way we’ve decreased our breakeven costs, we have redeployed our spend across the organization, and we’ve gone out and loaded up our longer term debt at lower interest rates. You can see where our liquidity is at the moment of $6.5 billion, $4 billion in the bag. We’ve done well over the last 2 years of making sure we preserve our balance sheet, so we have got the opportunity to move into this growth phase without needing price to work in our favor in the short term. Clearly, though, selling equity is important, but there is two parts to that. There is a phasing of capital that we can look at. So if we don’t get the pricing that we expect on…

Yes. And James, I think Peter has summarized it very well. I think also going back to the earlier question that Saul asked, and just to really be clear about that, we have said at our Investor Briefing Day that when we look for equity partners coming into Scarborough and Pluto that we want the right partner or partners at the right time and at the right price. And so having flexibility around the timing of that dilution activity, both for integrated ownership between Scarborough and Pluto and also perhaps standalone participation in Pluto Train 2, those projects are even much more valuable to us than they were 6 months ago now that we have de-risked further and are getting very close technically to a final investment decision and of course, because we now see materially higher resources in Scarborough than we saw at this time, last year. And so we have all of these levers that we look at, but we look at them not in a binary manner. We really step back and say, at the end of the day, what is the best value for our shareholders, both in the short term and in the long term, and then how can we balance those things against each other. And that’s very important to us and the Board that we don’t go in blindly, optimize to one number or blindly go into a transaction which might result in selling below optimal value if that’s not the best thing for our shareholders, given how strong these projects are and how much value that we see in them. Now that being said, the interest, even notwithstanding the coronavirus, is still very, very high from a large number of potential partners both for the integrated sale and for the Train 2 only piece of things, so that we are actively working that in parallel and that remains very strongly our base case at this point in time.

Okay. Can I perhaps ask you to be a little bit more explicit on the phasing of capital point, please?

Yes. Look, the phasing of capital point, James, as you look at it we have options, particularly on Browse. So if you think about it, we have always indicated to market that a potential equity decision would be around Browse FID just simply because we have got an overlay of our projects occurring. And that overlay of the project was not based on optimizing capital or people resourcing. That overlay was based on what we felt were market conditions, timing and then also the retention lease requirements that we had. So we needed to maintain rights to exploit the resource, which meant that those projects were accelerated and you had overlap. As it’s turning out, every month that Browse is delayed is quite significant with respect to the impact that it has on our debt loading and as we get new cash flow coming in. So that phasing is actually naturally happening now, anyway, with each month that Browse gets delayed through these commercial negotiations and that’s assisting us in that capital hump that we have got to get through.

I guess the pushback I have with that particular point though, Peter, is that the credit rating agencies are only going to forecast our metrics on projects that are actually sanctioned. And on that basis, they exclude construction CapEx for Browse and they still have the metrics turning negative.

They do. They do. Yes, they do, James. And of course, what we didn’t talk about is the other option is if – and you don’t like to do this, but the other option is just look at that credit rating and decide just how important that is to equity owners versus debt owners. And the stark reality is we have raised most of the debt that we need. And so the – so if we feel that holding on to a credit metric is to the detriment of our equity owners, then that’s a conversation, a tough conversation we are going to have with the Board. That rating is just one of a number of metrics that we look at. And as Sherry mentioned in our opening, the key for us is not necessarily credit metrics, but importantly the free cash coming out of our business and our ability to fund our projects. And that’s primacy. The rest is kind of like, do we – I get a gold star or a silver star on things. We’ve still got a long way before we would be concerned about being non-investment grade, and we certainly wouldn’t let the company get into that situation. But if it requires me to do something silly in the market just to maintain a credit – investment credit metric, now that’s just something we’re not going to do.

Yes. And I would just add to that because that’s very important, James, like you say, that one piece of it is how the credit rating agencies look at things. But the way we’re addressing our overall capital management is looking at the total capital requirements that we have, in particular, all the way out until 2024 when Scarborough and Pluto are onstream and producing because after that, things ease off quite significantly even with Browse in full construction mode. And so we don’t want to just look at how do we get through Scarborough and Pluto FID and early construction, but we want to look through our cash liquidity throughout that period at different oil prices and with different assumptions around phasing, including Browse, and make sure we’re strong throughout that period. And so yes the credit rating agencies will make different decisions around their assessment at FID, but we’re looking at it continuously throughout. And we think that’s a more holistic and robust approach to our overall cash management needs through that period.

Got it. Yes. I mean, our view of your liquidity is still pretty good through there. I guess, it’s just a view on that credit rating. So that’s very helpful disclosure.

Yes. It’s just – and it’s a judgment for you, James, as to the value of that. And certainly, we wouldn’t want to be going into FID having gone down a notch. But if, during process we slip and that’s because we’ve made a conscious decision with respect to the – our shareholders, then that’s something we’d be happy to explain at the time.

Great, thanks.

Our next question comes from Adam Martin from Morgan Stanley. Please go ahead.

Good morning. First question, just on sort of gas contracts for Scarborough, you have historically talked about the 50% in terms of sales, securing a pre-FID. Obviously, things are a bit tougher in the market at the moment. Is that you’re going to hold that 50% or would you push out FID or would you take some more risk if you can’t get to the 50% soon?

Good question, Adam. I think we would take more risk. Because there’s the key here on any project is the only thing you know on a project is how much is spent, and you only know that after the fact. We have got contracts in hand, that have significant value – and a very significant value, hundreds of millions of dollars of value in them because we have hit the low point in the cost cycle. We are very concerned that if continue to delay on Scarborough, then some of those contracts – well, we know some of those contracts will be opened up, and our view is designing one way that they will go, which is to increase. So yes, you always want to align the marketing up and you set a number out there, but we’re comfortable that we can trade through it. We obviously will test it at different pricing conditions to make sure that we’re not doing anything that puts us at risk, but I’m not going to be held to saying I need a 50% number. I mean that’s an appropriate thing, to be honest, if you need project financing because you are having to meet your financiers’ needs. But for a company like Woodside who has an LNG portfolio, we just – we don’t want to be selling gas just for the need to be able to meet a metric to tell somebody that we’ve got 50%. Because the flipside of that as you know Adam is you don’t see the contract I just sold it at. And we are not going to give it away just to simply meet that metric. So I would say there’s a bit of flex around it. I was very confident about it in October. The issue we’ve got at the moment, as I mentioned in a previous discussion is the coronavirus is preventing us in finalizing negotiations with some of our potential buyers.

That makes sense. Second question, just on arbitration with FAR, I thought we were meant to get something sort of pretty imminently at that first hearing. Can you just update the process there, where we are at?

Yes, we thought we were. And in fact, I think we said that it was imminent. Well, that is certainly what the International Court of Arbitration told us. They subsequently come back and said they made a mistake. Imminent wasn’t what they were intending to say. So it’s still weeks, potentially months away. I can’t tell you. They’ve gone very quiet now that they had to retract their previous advice. So we simply don’t know, to be honest with you. I would say on the positive side, we have had very successful outcome from a legal dispute with Bumi over the Balnaves project here recently, so that one is now behind us.

Okay, good. That’s helpful mate.

Thanks, Adam.

Our next question comes from Joseph Wong from UBS. Please go ahead.

Hi, guys. A question for me is just on the gearing position, I guess, how you look at it when you look at the, I guess, Investor Day back in more of late last year. Given the impairment that’s came through, how do you see your gearing position over the next few years under oil price assumptions?

That’s good question. So our gearing range remains unchanged. And I think we’ve said previously, but just to reiterate on this one that we’ve said within – between 15% and 35%, and that’s been adjusted simply because of the leasing standard coming into effect. What we have also said that we’ll match that up against credit rating metric outputs. And so it could be under certain scenarios that you wouldn’t take all the way up to that 35% to maintain a given credit rating. The impairment of Kitimat actually has a fairly nonmaterial impact on the gearing. You can probably calculate that out, but I would say well less than 1%. But that won’t be a significant factor on our gearing as we go forward in time.

So, Sherry is right, Joseph. Gearing is one metric, but as you know, it’s a very simplistic one. And it’s certainly not one that the credit agencies use, so they use their own metrics. So you might find we go through one of their key metrics before we reach a gearing limit or we may actually be able to get through a gearing limit before we hit one of their metrics. So it’s multidimensional with respect to how we’ll manage that balance sheet.

Yes, fair enough. Just the second question, in terms of, I guess, Pluto gas acceleration, can you provide any commentary? I guess you have got Pyxis FID. Is there any update on the discussions with Pluto and North West Shelf on the tolling? And I guess, leading on to that is, is there any discussion on onshore WA gas moving into North West Shelf haulage?

Okay, great question. So Peter talked earlier about the fact that there are multiple parties right now engaging with North West Shelf on what we call early ORO, or other resource owner, coming through. Pluto is right there in the mix as well as some other parties. And there have certainly been interested parties, both with offshore resources and with onshore resources. And so that’s something that, for us, alongside with working through the final terms and conditions of the Browse gas processing agreement, getting to a final investment decision on the North West Shelf side on the interconnector and getting these agreements in place is a key priority that we are actively progressing in 2020. Too soon to talk about which one of those parties are coming through when, but there are fairly advanced conversations with a couple of them, in particular, and others lined up behind that with a high level of interest.

Okay. And then the last question I’ve got is more – is sort of, in terms of the news items on McDermott, just if you could provide any commentary – that impact on Woodside’s kind of contracting if you can?

Okay. So McDermott, that’s a great question. So you will be well aware that McDermott has entered into a formal chapter 11 prepackaged bankruptcy and restructuring process. We have been working very well and very transparently with McDermott really throughout the period since it became a risk. And as they are going through it, you’ll be able to see directly from them all of the details of how they are packaging that, and in particular, the Lummus asset sale that goes along with that. We continue to believe that we can work through that with the plans that we have around our contracting, and we are also building in mitigations should they come up against any unforeseen issues with going through that restructuring. The great thing that we see is that their order book remains strong. They seem to have a very good hold on retention from their senior leaders, and in particular, their project managers. And we, of course, are watching that situation very closely to make sure that we can work collaboratively with them through that process.

Cool. That’s all for me.

Our next question comes from James Redfern from Bank of America. Please go ahead.

Yes, Peter and Sherry. Two questions, please. You mentioned earlier that the Scarborough sell-down, you might receive non-buying offers by the middle of the year. Just wondering what the timing is for the sell-down in Pluto Train 2 or is that process being run in conjunction with the Scarborough data room?

Yes, great question. I just want a very minor clarification. We’ve had a preliminary data room out there for a while. We are updating that, and we’ll officially release that probably in the next 1 to 2 weeks. So it’s almost complete, and we’re just doing the final assurances. We will open that up in parallel. We have a first priority on completing or continuing the conversations that we’ve had with potential partners that would like to have an integrated interest in Scarborough and Pluto, but we will be starting really in the next few weeks here to start to get additional indicators of interest on partners that are – potential partners that might be interested just in Pluto Train 2. It is – we are like Peter said, and I have mentioned it as well, we are flexible on the exact timing. The ideal, of course, would be to have both of those types of transactions concluded at FID, but we are flexible to go beyond the final investment decision, should that bring the best value. And if, for example, you had an infrastructure-type investor who came in and became our partner of choice for Pluto Train 2, it’s more likely that they would feel more confident to come in and conclude a transaction after final investment decision. So we’ll be flexible on that, but you would most likely see, based on where we’re seeing it now, that you might see one dilution on an integrated basis and then perhaps another one after that on just Train 2.

So James, just so we’re not confused about data rooms. The one I mentioned is the Scarborough upstream data room, which we can populate because there are no outstanding commercial agreements and so forth on that. The Train 2 data room will open up once we’ve been – fully once we’ve completed all of the agreements both with BHP and then also with the Pluto Train 1 and common-use facility owners. And that’s going to finish in the next few weeks. Of course, you can’t sell Train 2 to that type of buyer without having those commercial agreements in place because that’s really what they’re interested in. Whereas an upstream purchaser, they know that the value of their acquisition is very much driven by the quality of the resource and the development concept. So it’s just a different lens that people will look through on that. I would kind of remind you that Pluto – sorry, the Train 2 at Pluto will be a lump sum contract. So once we’ve inked the final deal with Bechtel on that, we’ll be able to put that into the data room as well, and they’ll be able to see what sort of capital risk they have.

Okay, thanks and that’s useful. And just in terms of unit cost, unit cost, $4.50 per BOE, excluding the Pluto turnaround last year, so given the increase in production for 2020 and the 2 plant shutdowns, I mean, do you think it’s reasonable that we could expect unit costs to be well below $4.50. And I note that the $4.50 was a record low for Woodside historically. Thanks.

So we haven’t guided specifically on unit cost for 2020. Indeed, you should look at the Pluto cost, in particular, as being very cyclical in nature and not to be present again in 2020. Of course, you’ll see full year impact of greater infills being onstream, Wheatstone second year of full production. There will be turnaround activity in the North West Shelf, but not major, like we saw in Pluto last year.

Yes, okay, okay cool. Alright, thank you very much.

So we are going to have a crack at it, James.

Yes, thank you.

Our question comes from Ben Wilson from Royal Bank of Canada. Please go ahead.

Alright. Good day, Peter and Sherry. I just have a quick question. Note your comments around the contracting or the potential for costs to go up should you delay Scarborough further. I just wanted to know whether you have seen any impact or predict any impact from the potential or probable deferral of the 3 train project up in PNG, both in respect to construction costs market but also on the gas marketing front. Is it too early to see that or have you noticed anything out in the market?

Look, it’s a good question, Ben. We haven’t seen it yet from a product point of view. The key, I think, to look at that is that you have got so many other projects that went to FID in 2019. And it was a record amount that went to FID. And of course, they are in the market looking for things like compressors and so forth, and that’s where some of our pressure points are going to be. So I don’t think the fact that anything may or may not happen in PNG is going to drive that, given the numbers of those particular projects. Now where we may see it will be on people as we get into the construction phase because – so that’s a net positive to us. It will take some pressure off the people because those people would have been sourced mainly out of Australia. And so we think – we haven’t factored it in, but I think there will be some positives for us with respect to lessening of the pressure on the workforce requirements for us.

And did you – sorry, did you address that on the gas markets? You haven’t seen anything for that sort of contract term, 2025 plus, where you are targeting similar customers in a similar timeframe?

No, we haven’t said it yet. No, we haven’t seen it yet. It’s an interesting one because both projects would have a similar view with respect to the way that we would want to market it, whereas you know, many that we would want contracts in place for a certain volume of it. We’ve seen an unusual situation in 2019 occur where some of the major players, including Novatek and so forth, have sanctioned projects with our gas contracts in place and are willing to put it into their global portfolios. So of course, it’s not transparent then what their actual positions are, whether they are long or short in those particular portfolios. We’ll only know that as time plays out. So I would expect we would have been targeting probably similar markets, similar buyers. So again, in that regard, whilst we have not seen it directly at this point, it certainly doesn’t hurt our marketing efforts, but we – like I said, we take no joy in seeing all these projects get delayed. We just – you asked a direct question. It can only be helpful for us. I just haven’t seen an impact that I can share with you.

Got it. Thanks very much Peter.

Thanks, Ben.

We have time for one final quick question from Tom Prendiville from CLSA. Please go ahead.

I just got a quick question on Kitimat. Obviously, Chevron has written off 100% of its book value, but Woodside has only written off 50%. I was just curious as to what gives you the confidence in throwing more money at this project when Chevron has seemed have to lost faith at least for now?

Yes. Thanks for the question, Tom. I think it just gets down to what you are seeing in your portfolio. I wouldn’t say Chevron’s lost the faith in it at all. It actually provides some – a lot of room to maybe book a profit on sale at some point in the future. So you can look at this cup half empty or cup half full, so to speak. With respect to Woodside’s view of it, as I said, we have decreased the cost structure on it by a good 30%. Actually, the unit costs have come down even more because we’ve increased the throughput from 10 million tons to 18 million tons. It will be the greenest project in the world by far, because we will use power from hydro. And we have had good indications around what the costings of the pipeline will be an interest in the downstream plant. The impairment was simply taking a pragmatic view of the Liard resource. And looking at the timing of it and just saying, look, it’s now – because the current plan is to use gas from Western Canada to feed the plant. The Liard resource is now getting pushed out into a period of time where we need to increase the risking on the discount rate that we used. We increased it quite significantly because just simply, climate-related risk and development-related risks on that. And we also then looked at the pricing and said, well, we’re not very good at forecasting pricing. So rather than have pricing with an assumption of potential growth in the future, just run it flat and see what it looks like. So the board and management have taken a very conservative view of the asset, but with respect to the fundamentals of the development,…

Okay, great. Thank you.

Okay. Look, everybody, thanks very much for being on the call this morning. In fact, thank you very much for your questions. I hope we’ve been able to give you some further insights that you’d be able to share with investors and your clients. Again, as I mentioned, we’ve done very well in managing our balance sheet through this period, getting our cost base and continuing to get it down, improving the performance of our base facilities. There are a couple of one-offs in our business that won’t recur in 2020, so we’ll have a much clearer year. We had some accounting changes with respect to leasing. We had internal tariff changes that it flowed through. So there are a number of changes in our accounts that will work with you. I know over the next days and weeks to help you better understand where all the movements have been. It is difficult market conditions for us at the moment. We are not sugarcoating that at all, but as I’ve mentioned at the beginning of the call, our contracts have not been affected to this point. We’ve not receive notice from any customers with respect to their intentions not to take our product. And so at this point, for Woodside, it’s business as usual, but we’re continuing to monitor it very, very closely. Our growth projects are kicking off, as I said. On the major one, Sangomar has gone to FID and the project team is in place and already moving globally to the offices to move that forward. And we’re focused on getting Scarborough to FID this year in the time frames that we’ve indicated to you previously. And then, of course, we’ll complete the Browse gas processing negotiations with North West Shelf this year as well. So we are moving it forward, but we are under no misapprehension as to the challenges in front of us, both in the execution phase – the commercial phase now, the execution phase and then making sure that we maintain a robust cash flow coming into the company so that we can both reward investors through continued distributions, but then also execute these growth projects, which are unprecedented for us with respect to the scale and the impact on the company. So with that, I look forward to seeing you over the next days and weeks. Thanks very much for your time this morning.