Woodside Energy and Chevron have agreed on an asset swap deal involving several liquefied natural gas (LNG) projects in Western Australia (WA).

The asset swap involves the transfer of Woodside's 13% non-operated interest in the Wheatstone project and 65% operated interest in the Julimar-Brunello project to Chevron.

In exchange, Woodside will receive Chevron’s 16.67% stakes in both the North West Shelf (NWS) project and the NWS Oil project, along with a 20% interest in the Angel carbon capture and storage (CCS) project and a cash payment of up to $400m (A$640.56m).

The deal aims to streamline Woodside’s Australian LNG portfolio by focusing on operated assets and simplifying the ownership structure of the NWS joint venture (JV).

This is expected to enhance the economic recovery of existing production and unlock future development opportunities.

The transaction is expected to close in 2026 and is contingent upon several customary conditions including clearances from the Australian Competition and Consumer Commission and Foreign Investment Review Board, as well as approvals from other applicable state and federal regulatory bodies.

It also requires consent from third parties and the pre-emption rights of the continuing JV participants.

The transaction hinges on the completion of the Julimar phase three project, which involves a four-well tie-back to the existing Julimar field production system.

The project is currently in the execution phase. Woodside will operate this phase until the project's start-up.

Chevron's cash payment to Woodside includes $300m at the completion of the deal, with additional contingent payments of up to $100m related to the handover of the Julimar phase three project and its subsequent production performance.

Woodside CEO Meg O’Neill said: “The strategic and commercial rationale for this asset swap is compelling for Woodside.

“This transaction simplifies our portfolio, improving our focus and efficiency by consolidating our position in our operated LNG assets. It is immediately cash flow accretive and includes a cash payment upon both execution and completion.”

Last month, Woodside completed the sale of a 15.1% interest in the Scarborough JV to Japanese power generation company JERA.

Woodside received approximately $1.4bn from the sale of equity in the Scarborough JV, which includes both the purchase price and reimbursed expenses.