"We believe management will address the growing optionality surrounding North West Shelf downstream infrastructure," the broker said.

"While the NWS joint venture has understandably left the development of its most expensive resource till last, positive LNG contract repricing this year could help improve margins - and is likely to be the most significant driver of earnings outside of oil prices - with a willingness to open NWS infrastructure to third-party access likely to add incremental return."

Extending the life of NWS was considered a costly development for minimal return.

"With more than 30% of remaining NWS reserves remaining undeveloped across Greater Western

Flank/Persephone & Lambert Deep [fields], we estimate that a further $A10 billion [nominal, gross] will need to be invested in the upstream to underpin supply into next decade, in addition to the $1.5 billion Karratha Life Extension Project," Macquarie said.

"Furthermore, with 15% of gas from Western Flank phase 2 and Persephone earmarked for domestic gas obligations, undeveloped reserves will only extend the upstream supply into Karratha by about five years."

However, NWS also has a possible option to toll production from Hess Corporation's Equus gas project in Western Australia's Carnarvon Basin following a non-binding letter of intent that was struck late last year.

This gas project has a final investment decision expected as early as 2017 and could produce first gas in 2021.

"With a tie-in and operational integration front end engineering and design agreement executed during 1Q15, Woodside anticipates that a binding agreement will be concluded this year," Macquarie said.

The broker estimated the NWS tolling fee for the Equus project would have to exceed $US3.4 per million cubic feet of gas to offset the opportunity cost of forgoing the development of the joint venture's "own undeveloped equity molecules in the current LNG spot price environment".

The broker also noted that Woodside's domestic gas strategy was evolving while 2015 represented a significant year of contract LNG repricing.

Overall Macquarie reduced its estimate of Woodside's net asset value by 2% to $34.71 per share, made when the shares were $35 each, and said this was predominately due to "additional domestic gas obligations at NWS and a reduction in late life spot LNG sales".

Woodside's annual investor day is scheduled for May 21.