Woodside said it has investigated a number of potential acquisitions to give it a platform for future growth.
"This investigation identified the Veba assets as a suitable target, and Woodside has expressed interest in acquiring these assets," it said in a statement.
Woodside would try to raise A$1 billion (US$520 million) in fresh equity if it won a bid for Veba, which it put at US$2 billion.
Bids for the Veba assets closed in mid-January with a number of other parties also expressing interest.
"Negotiations leading to the execution of a sale and purchase agreement are likely to continue for some time," Woodside said.