May 23, 2018 / 6:07 AM / 3 months ago

Woodside looks to speed up Scarborough gas development off Australia

MELBOURNE (Reuters) - Australia’s biggest liquefied natural gas (LNG) producer Woodside Petroleum on Wednesday outlined plans to accelerate and expand its Scarborough gas project off northwestern Australia, now expected to cost $10 billion.

The logo for Woodside Petroleum, Australia's top independent oil and gas company, adorns a promotional poster on display at a briefing for investors in Sydney, Australia, May 23, 2018. REUTERS/David Gray

Fresh from buying out ExxonMobil Corp to gain control over the Scarborough field, Woodside is looking to start producing gas in 2023, two years earlier than previously flagged, with LNG production from an expanded Pluto plant starting in 2024.

First gas would be piped to the North West Shelf LNG plant, operated by Woodside, via a link from the Pluto facility. This meant Woodside would reap revenue on up to 3 million tonnes of LNG one year ahead of completing a second LNG production unit at the Pluto plant, which would then handle Scarborough gas.

Woodside also said it has increased the planned size of the second unit, or train, at Pluto to 4-5 million tonnes per annum (mtpa), which would double the plant’s capacity. The original plan was for a second train that could produce 2-3.3 mtpa.

The expanded plant could take gas from other long stranded fields in the area, which have substantial reserves but no way of getting the gas to market, including fields owned by Chevron Corp and Royal Dutch Shell.

As operator of Australia’s biggest LNG plant, North West Shelf LNG, as well as Pluto LNG, Woodside sees other companies relying on it to help them develop remote, deepwater gas fields discovered over the past 40 years to fill what is expected to be a gas supply gap opening up around 2023, as Asian demand soars.

“That puts us really in a commanding position as we go forward in dealing with those owners,” Woodside Chief Executive Peter Coleman said at the company’s annual investor day.

Coleman said he was open to talking to other resource owners who could hook into Woodside’s pipelines and LNG plants, but they would need to talk to him by the third quarter of this year, before the company starts design work on the Scarborough project.

“They need to stop messing around and give me some offers,” Coleman said.

Reporting by Sonali Paul; editing by Richard Pullin

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