SYDNEY — Australia’s Woodside Petroleum Ltd. continues to assess potential investments in low-carbon energies such as hydrogen and ammonia but says the market remains in its infancy as an alternative energy source and the company continues to expect liquefied natural gas to be in great demand during a global decarbonization.
Meg O’Neill, the newly appointed chief executive of Woodside, which recently agreed to buy BHP Group Ltd.’s oil-and-gas business, on Friday dismissed concerns from environmentalists about Woodside doubling down on fossil fuels with that deal, saying LNG will play an important role as countries including Japan, Korea and China transition away from higher-polluting fuels such as coal. Following the proposed tie-up, Woodside should be a global top 10 LNG producer.
Ms. O’Neill said Woodside continues to consider investments in low-carbon energy, too, including via several consortia and partnerships with prospective customers of those products. Woodside last year signed an agreement with JERA–a joint venture of Tokyo Electric Power Co. Holdings Inc. and Chubu Electric Power Co.–Marubeni Corp. and IHI Corp. to consider the potential for large-scale export of hydrogen as ammonia.
“We do see hydrogen and ammonia as a significant market, but the market is quite small at this point in time,” Ms. O’Neill said in an interview. “So we’re working closely with those prospective customers on understanding what the market would look like and what their demand profile will be as time progresses.”
Some investors fear oil and gas companies have been slow to react to a changing energy landscape, and there is a broadening push from environmental groups and activist investors for the industry to better address concerns about climate change. Ms. O’Neill said Woodside has made commitments to reduce its net emissions and recognizes it has a key role to play in the transition to a lower-carbon economy.
Woodside will release more detail on its plans in climate-change reports due to be released ahead of its 2022 annual shareholder meeting, Ms. O’Neill said.