Woodside CEO: land-based LNG development for Browse, Scarborough still on the table

Woodside Chief Executive Peter Coleman said Wednesday that natural gas from the Browse and Scarborough fields off Western Australia could be processed onshore.

Currently, the joint venture partners in both of the resources are looking at a floating liquefied natural gas (LNG) option to develop the fields.

However, depending on the commercial aspects, the gas could be processed at the Burrup LNG hub where the Pluto and the Nort West Shelf projects are located.

“I mentioned previously that we need to keep commercial tension on this and we also need to make sure that we get the very best development,” Coleman told reporters after announcing the company’s full-year results.

“What we are saying is… we want to make a case that an onshore development should be a very competitive case the joint venture partners in both of those resources should seriously consider,” Coleman said.

“At the moment, we are starting from behind because FLNG is the preffered case at this point. I think it is up to the joint venture partners in both of those onshore assets, North West Shelf and Pluto, as I mentioned, we have the advantage that we are in both, to make sure we provide the best compelling case we can to get those resources coming that way. If we don’t, then the option will be floating,” he added.

Woodside agreed in September last year to buy half of BHP Billiton’s stake in the Scarborough area fields off Western Australia for $400 million. ExxonMobil’s affiliate Esso Australia Resources is the operator and owner of 50% of the Scarborough gas field in a joint venture with Woodside (25%) and BHP Billiton (25%).

On the other hand, Woodside and its partners in the Browse LNG project in March 2016 delayed the multi-billion Browse LNG project due to low oil prices. Woodside’s participating interest in the Browse resources is 30.6%, Shell owns 27% in the Browse JV while BP holds a 17.33% stake. Japan Australia LNG (MIMI Browse) has a 14.40% stake in the JV, and PetroChina holds a 10.67% stake.

Profit climbs

Woodside posted a full-year net profit after tax of US$868 million, up from $26 million in 2015, and achieved 3% higher annual production of 94.9 MMboe.

During the year, Woodside’s LNG production hit 63.7 MMboe (million barrels of oil equivalent), up 6 percent from the year before.

Australia’s largest LNG player has come through the oil price crash over the past two years in better shape than rivals, with $2.7 billion in cash and undrawn debt.

Coleman said that he was proud that the company maintained its credit rating during the downturn, one of a few companies that managed to do so.

Woodside is also looking to boost output from its Pluto LNG plant and aims to start an LNG truck facility at the terminal by the end of this year.

Coleman reaffirmed the start-up of the Chevron-operated Wheatstone LNG project.

“We look forward to the first LNG cargo from Wheatstone in mid-2017, followed by the start-up of Train 2, six to eight months later. Wheatstone LNG is expected to provide more than 13 MMboe (Woodside share) of annual production once fully operational,” Coleman said.

LNG World News Staff