Woodside-Alcoa gas agreement
Woodside Energy secures 31.1 PJ gas supply deal with Alcoa for WA operations through 2030
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Key Points
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Woodside produced 90.3 petajoules of Western Australian natural gas in 2025, representing about 21% of the state's domestic gas supply.
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Mark Abbotsford, Woodside Energy Group's Chief Commercial Officer, described the contract as underscoring Western Australia’s domestic gas policy with stable and predictable settings that underpin the delivery of gas to major industrial users, enabling lower-emissions energy use in key processing sectors.
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The deal will supply gas to Alcoa’s Western Australian alumina refineries, supporting thousands of local jobs in the region.
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The arrangement leverages the December 2025 extension of the Pluto-Karratha Gas Interconnector to enable additional Pluto-sourced gas to be processed using existing capacity at the Karratha Gas Plant, accelerating delivery to market via existing industrial infrastructure.
Woodside Energy has locked in a 31.1 petajoule domestic gas deal with Alcoa of Australia, supplying the mining giant's Western Australian alumina refineries from 2027 to 2030, according to LNG Prime. The four-year agreement builds on a supplier relationship stretching back more than four decades and uses the recently extended Pluto–Karratha Gas Interconnector to get gas to market faster.
Woodside's shares dipped to $28.60 after the announcement — a roughly 1.5% fall — as Reuters noted that falling global crude prices below US$78 a barrel overshadowed the domestic deal.
How the Pluto Interconnector Made This Deal Possible
The key to unlocking this contract was a government decision made in December 2025. The Western Australian Government approved an extension of the Pluto–Karratha Gas Plant Interconnector, according to Mining Weekly. That approval lets Woodside route gas from its Pluto field through the existing Karratha Gas Plant for processing. It effectively freed up extra supply without building new infrastructure.
Woodside produced 90.3 petajoules of WA domestic gas in 2025 — about 21% of the state's total supply. Chief Commercial Officer Mark Abbotsford said the deal "underscores the ongoing effectiveness of Western Australia's domestic gas policy in providing stable and predictable policy settings" and enables "lower-emissions energy use in key processing sectors," according to Grafa.
Alcoa's WA Refineries Are Fighting to Stay Viable
Alcoa closed its Kwinana refinery permanently in September 2025, citing aging facilities and poor bauxite grades. The closure came with a restructuring charge of roughly $1.7 billion. That left only the Pinjarra and Wagerup refineries operating in WA, according to LNG Industry.
This 31.1 PJ gas contract is seen as a lifeline for those two sites. Alcoa is Western Australia's largest single energy user, consuming around 10% of the state's annual gas. The deal supports thousands of local jobs and keeps alumina — the raw material for aluminium — flowing through WA's industrial base, according to OE Digital.
WA's Gas Reservation Policy Gets a Win — and Some Criticism
Under WA's domestic gas policy, offshore gas exporters must reserve 15% of production for local use. Abbotsford's comments signal Woodside views that policy as a selling point, not a burden. The WA Government is expected to point to this deal as proof the reservation system works, according to Grafa.
Not everyone agrees. The Conservation Council of WA described Woodside's broader gas strategy as "economically questionable" and raised concerns about the company's proposed Browse project near Scott Reef. Environmental groups argue the focus should shift away from gas rather than locking in new fossil fuel supply chains into the 2030s.
Scarborough Ramp-Up Gives Woodside Room to Supply Both Markets
The timing of this deal lines up with Woodside's Scarborough project reaching 91% completion in January 2026. The floating production unit arrived in Australia and the project "switched on" for start-up activities on April 16, 2026, targeting its first LNG cargo in the second half of 2026, according to LNG Prime. That ramp-up gives Woodside more gas to work with across both export and domestic channels.
Analysts at Motley Fool described the domestic contract as "stable but low-margin" compared to LNG exports. They noted Woodside's share price remains far more sensitive to global oil prices than to local industrial deals. Still, locking in a 21% domestic market share through 2030 keeps Woodside firmly ahead of emerging rivals in WA's tightly managed gas market.
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