Woodside’s Hydrogen Bet: Decoding the 2025 Shift from US Setbacks to Asian Supply Chains

Industry Adoption: Woodside Energy’s Pragmatic Pivot in the Hydrogen Economy

Between 2021 and 2024, Woodside Energy’s approach to hydrogen and new energies was characterized by broad, exploratory diversification. Bolstered by the massive capital base from its 2022 merger with BHP’s petroleum portfolio, the company embarked on a multi-pronged strategy. This period saw a flurry of partnerships aimed at testing the entire value chain, from fundamental R&D with Monash University on electrolysis technology to feasibility studies for a liquid hydrogen supply chain into Singapore with Keppel and Osaka Gas. Woodside explored novel production methods like methane pyrolysis with 1414 Degrees and even invested in renewable power technologies like concentrated solar with Heliogen. This “portfolio” approach signified a company building options and de-risking various technologies, but without committing to a single pathway. The strategy was global in ambition, with significant projects planned for Australia (H2Perth), Asia, and the United States (H2OK).

The year 2025 marks a sharp and decisive inflection point, shifting the narrative from exploration to execution and financial discipline. The most significant event was the July 2025 abandonment of the H2OK liquid hydrogen project in Oklahoma, which resulted in a $US140 million profit hit. This move signaled a new realism, where projects must meet stringent commercial criteria, not just technological promise. In its place, Woodside has doubled down on a more focused strategy: leveraging its core natural gas assets and long-standing customer relationships in Asia. The September 2025 Memorandum of Understanding with Japanese giants JOGMEC, Sumitomo, and KEPCO to establish a liquid hydrogen supply chain from its proposed H2Perth project is the clearest evidence of this pivot. This consolidates the company’s efforts around an Australia-to-Asia export model, a familiar playbook from its decades of LNG dominance. The parallel focus on decarbonizing its gas operations, evidenced by the collaboration with Baker Hughes on the NET Power platform, reinforces that hydrogen is being integrated as a strategic evolution of its core business, not a radical departure from it.

Table: Woodside Energy’s New Energy and Decarbonization Investments

Table: Woodside Energy’s Strategic Partnerships in New Energy and Decarbonization

Geography: Woodside Energy’s Strategic Realignment to an Australia-Asia Hydrogen Axis

Between 2021 and 2024, Woodside’s geographic strategy for new energy was globally dispersed. The company was actively pursuing opportunities in its home market of Australia, with plans for the H2Perth green hydrogen project and research partnerships like the one with Monash University in Victoria. Simultaneously, it was laying groundwork in key Asian markets, exemplified by the 2021 MOU to study a liquid hydrogen supply chain to Singapore. The United States was also a major focus, with the proposed H2OK project in Oklahoma and the Heliogen solar demonstration planned for the US. This widespread footprint reflected an intent to capture opportunities across different regulatory and market environments.

From 2025, Woodside’s geographic focus has undergone a significant consolidation. The cancellation of the H2OK project in Oklahoma marked a strategic retreat from a major US-based green hydrogen production plan. In its place, the company has sharpened its focus on the Australia-to-Asia export route. The September 2025 MOU with JOGMEC, Sumitomo, and KEPCO to supply liquid hydrogen from Australia to Japan is now the flagship initiative, leveraging Woodside’s strong presence in Western Australia and its decades-long relationships with major Japanese energy buyers. While the US remains important for its LNG business and future potential low-carbon ventures, as seen with the Stonepeak partnership in Louisiana and the OCI ammonia project in Texas, the primary momentum for Woodside’s hydrogen ambitions has clearly shifted to the Asia-Pacific region.

Technology Maturity: Woodside Energy’s Shift from R&D to Commercial De-Selection

The 2021–2024 period was defined by Woodside’s engagement with technologies across the maturity spectrum, with a heavy emphasis on early-stage development and feasibility. The partnership with Monash University on Solid Oxide Electrolysis (SOEC) represents foundational R&D. Further along, the collaboration with 1414 Degrees on methane pyrolysis and the 5 MW Heliogen concentrated solar facility were both at the pilot and demonstration stage, designed to test novel production and power generation concepts. Efforts like the 2021 MOU with Keppel to study a liquid hydrogen supply chain were at the pre-commercial feasibility stage. The overarching trend was one of technological exploration to understand what was possible and to build a portfolio of options for the future.

Beginning in 2025, Woodside’s approach to technology has matured from exploration to a disciplined process of commercial validation and strategic selection. The abandonment of the H2OK project, planned to produce a significant 90 tonnes per day of liquid hydrogen, was a clear signal that a technology’s operational readiness is insufficient without a robust commercial case. This represents a critical de-selection. Conversely, the company is now prioritizing technologies that directly support its core business. The collaboration with Baker Hughes to advance the NET Power platform—a near-commercial technology for generating power from natural gas with inherent carbon capture—is a prime example. This move signals a focus on deploying viable, dispatchable, low-carbon solutions to decarbonize existing assets. The shift from a broad feasibility study (Singapore, 2021) to a targeted offtake term sheet (Keppel, 2024) and a major international supply chain MOU (Japan, 2025) indicates a clear progression from testing possibilities to building commercially-grounded projects.

Table: SWOT Analysis of Woodside Energy’s Hydrogen Strategy Evolution

Forward-Looking Insights and Summary

The data from 2025 paints a clear picture of Woodside Energy’s path forward: pragmatic, focused, and deeply integrated with its core business. The cancellation of the H2OK project was not a failure of ambition but a demonstration of a new, hard-nosed commercial reality that will define its strategy. For executives and investors, this signals that Woodside will not chase green growth at any cost; projects must be commercially sound and, where possible, leverage existing strengths in gas processing, large-scale project execution, and long-term customer relationships.

Looking ahead, the primary signal to watch is the progression of the Australia-to-Asia hydrogen strategy. A Final Investment Decision (FID) on the H2Perth project and the conversion of the Japanese MOU into binding offtake agreements will be the ultimate validation of this focused approach. Secondly, progress on the Baker Hughes NET Power TDA is crucial. A successful pilot could provide Woodside with a proprietary, scalable technology to decarbonize its global LNG operations, directly addressing its emissions targets and improving its ESG profile. While the $5 billion new energy fund is significant, the market should monitor its allocation closely. Expect to see capital flowing toward projects that either decarbonize profitable gas assets or create new hydrogen export routes to established Asian partners. The era of broad exploration is over; the era of disciplined execution has begun.

Frequently Asked Questions

What was the most significant change in Woodside’s hydrogen strategy in 2025?
The most significant change was a pivot from a broad, exploratory strategy to a focused, commercially disciplined one. Woodside moved away from pursuing multiple global opportunities, like the H2OK project in the US, to concentrate on leveraging its core strengths—its Australian assets and Asian customer relationships—to build a specific Australia-to-Asia hydrogen supply chain.

Why did Woodside abandon its H2OK hydrogen project in the US?
Woodside abandoned the H2OK project in Oklahoma because it did not meet the company’s new, more stringent commercial criteria. This decision, which resulted in a $US140 million profit hit, signaled a shift in strategy where projects must have a robust commercial case and financial viability, not just technological promise.

How is Woodside’s new hydrogen strategy connected to its existing LNG business?
Woodside’s new strategy is deeply integrated with its core LNG business in two ways. First, it is leveraging its decades-long relationships with major LNG customers in Asia (like Japan and Singapore) to establish new supply chains for liquid hydrogen. Second, it is investing in technology like the NET Power platform to decarbonize its own natural gas operations, treating new energy as an evolution of its core business.

What is the new primary focus of Woodside’s hydrogen investments?
The primary focus is establishing a liquid hydrogen supply chain from its proposed H2Perth project in Australia to key Asian markets. The September 2025 Memorandum of Understanding (MOU) with Japanese energy giants JOGMEC, Sumitomo, and KEPCO is the clearest example of this focused Australia-to-Asia export model.

Based on the analysis, what are the key things to watch for in Woodside’s future progress?
The key indicators of future success will be a Final Investment Decision (FID) on the H2Perth project and the conversion of MOUs with Asian partners into binding offtake agreements. Additionally, progress on the Baker Hughes NET Power collaboration is crucial, as a successful pilot could provide a scalable solution to decarbonize Woodside’s global LNG assets.