Woodside Locks In Alcoa Gas Supply Deal, Placing Early Scarborough Domestic Volumes
A 31.1 petajoule contract with Alcoa from 2027 to 2030 signals Woodside is already placing WA domestic gas volumes tied to its Scarborough expansion.
Woodside Energy Group has signed an agreement with Alcoa to supply 31.1 petajoules of Western Australian natural gas between 2027 and 2030, the company disclosed on Wednesday (2026-06-24), locking in domestic volumes as its Scarborough field development moves toward first production.3
Alcoa's WA refineries process bauxite into alumina and run continuously on gas, making long-term supply contracts a production necessity. Securing 31.1 PJ from an operator with an established WA footprint gives the alumina maker a degree of certainty that spot markets cannot easily provide at the volumes required.3
Woodside produced 90.3 petajoules of gas in Western Australia during 2025, the company said, representing about 21 percent of the state's total domestic supply. That volume comes primarily from the North West Shelf project and existing Pluto Train 1 output, both of which are mature assets where production profiles are beginning to taper.3
The Alcoa contract timing tracks directly against the Scarborough development schedule. The project, centred on the Scarborough field off the coast of Karratha, is being built to supply a second processing train at Pluto LNG with nameplate capacity of five million metric tons per annum. Woodside said extended Interconnector arrangements between Scarborough and the Pluto facility will also enable approximately 22.9 petajoules of additional gas for the WA domestic market, alongside 22.6 MMboe of incremental LNG production, once the expansion is operational.3
The domestic allocation carries regulatory weight. Western Australia's domestic gas reservation policy requires LNG exporters to set aside 15 percent of production for local use. Scarborough generates new reservation headroom, and the Alcoa agreement is an early placement of that future volume — one that pins a committed off-taker to what would otherwise be uncontracted domestic supply.3
Alumina refining requires sustained process heat that cannot easily switch fuels on short notice, making multi-year contracts with production-stage counterparties the standard procurement approach. Alcoa operates several large WA facilities including refineries at Pinjarra and Wagerup, and a prolonged gap in gas supply would halt operations rather than merely add cost.3
The broader WA gas supply picture has tightened across the past several years. Rising seasonal demand and maturing legacy fields have created a structural gap that new projects are racing to fill before the mid-2020s, according to Wood Mackenzie analysis. Without significant new reserves coming onstream on time, the state market faces shortfalls.2
Australia's LNG capital deployment over the past two decades was immense — the wave of projects that reached final investment decision between 2007 and 2012 drew roughly $234 billion in aggregate capex, according to analysis by the Australian Centre for Corporate Responsibility. Returns across that build-out have been uneven, with estimated internal rates of return ranging from 3.4 percent to 10.4 percent across the projects, with Gorgon the only facility to exceed 10 percent.1
At JKM prices of $15.74 as of Wednesday (2026-06-24), Woodside's export economics from WA LNG remain supportive enough to sustain investment in both the Scarborough export train and the domestic reservation volumes the Alcoa contract draws on. The immediate execution risk is Pluto Train 2 commissioning: any delay in Interconnector completion would push back both the export and domestic supply volumes that the 2027 delivery date presupposes, leaving Alcoa and Woodside to manage a contract that arrives before the field it depends on.