O’Neill added after the invasion of Ukraine the European Union had a multifaceted response to its dependence on Russian gas and while it wanted to reduce total gas demand, it also wanted to diversify its supply, which was a boon to other producers such as Australia.

Despite O’Neill’s confidence in the long term, Woodside shares slumped 4.6 per cent on Tuesday, as did many other Australian commodity exporters, including BHP, which suffered a 5.8 per cent dip.

Woodside shareholders will vote at the company’s annual general meeting on the acquisition of BHP’s petroleum division in three weeks time. A successful vote would result in BHP shareholders holding 48 per cent of the enlarged company.

O’Neill said the acquisition would diversify Woodside’s LNG-dominated production with more oil and pipeline gas and give it the financial strength to invest in new areas of energy, including hydrogen, ammonia and carbon capture and storage.

Woodside plans to spend $US5 billion ($6.9 billion) on these “new energy products” by 2030 but the first draw on free cash flow from BHP production will be the $US12 billion Scarborough gas project that will feed an expanded Pluto LNG plant in WA’s Pilbara.

In January Woodside gave US construction giant Bechtel notice to start building a second LNG train at its Pluto plant and the manufacture of pipe to transport the gas 400 kilometres to shore has started.

Scarborough, expected to come online in 2026, will help offset already dropping production from Woodside’s foundational North West Shelf (NWS) project and an expected decline from the Pluto field later this decade.

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However, to keep the NWS plant full Woodside must also develop the carbon dioxide-rich Browse fields 900 kilometres away.

O’Neill said one option to store most, if not all, of the CO2 in the Browse gas, was to inject it into a reservoir near where the gas was produced.

Alternatively, it could be piped to shore with the natural gas, extracted, and then sent offshore to be buried in the disused Angel field that once supplied the NWS LNG plant.

The Coalition has offered Woodside - together with BP, Mitsui and Mitsubishi that all have equity in both Browse and the North West Shelf - $40 million to explore capturing carbon dioxide from industry in the Pilbara and storing it offshore.

O’Neill said Woodside needed to conclude negotiations with partners in the NWS project to process Browse gas and better understand the requirements of state and commonwealth environmental regulators before committing to substantial engineering work on Browse.

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