It comes after the gas giant launched a multibillion-dollar equity raising to acquire control of fellow Scarborough joint venture company ExxonMobil’s share of the project.
Last month, Woodside announced it would sell $2.5 billion worth of shares in order to buy up to 50 per cent of the Scarborough gas field off Western Australia, lifting its stake to 75 per cent of the project.
"The acquisition of the additional interest in Scarborough provides greater alignment, control and certainty over a low-cost, high-value opportunity ahead of a global LNG supply gap," Woodside chief executive Peter Coleman said at the time.
Now Woodside is increasing its control over Scarborough, as BHP waives its right of pre-emption, or the first opportunity to acquire an additional holding in the project, and supports ExxonMobil’s sale and Woodside becoming Scarborough's main operator.
As part of the agreement, Woodside will allow BHP to buy an additional 10 per cent interest in Scarborough up until December 31, 2019, ahead of the front end engineering and design (FEED) phase of the project.
Fat Prophets analyst David Lennox believes Woodside's holding is unlikely to change following this agreement and BHP will forgo the option.
"I suspect BHP won't take up the 10 per cent interest, as they'll be more focused on getting rid of their shale assets and optimising what's left more than lifting their interest in an underdeveloped field," Mr Lennox told Fairfax Media.
Woodside welcomed the latest agreement with BHP.
"I am pleased BHP has agreed that Woodside will become operator of the Scarborough Development," Mr Coleman said.
"The Scarborough joint venture will now be focused on finalising the development concept prior to entering FEED and positioning for Final Investment Decision in 2020."
The completion of the acquisition of ExxonMobil’s stake in Scarborough is expected by the end of the first quarter of this year.