Woodside to base new LNG facility on Pluto find

Rick Wilkinson
OGJ Correspondent

MELBOURNE, Aug. 8 -- Woodside Petroleum Ltd. has added a new gas project to its global list of developments with the announcement that planning has begun for a new LNG facility centered on its recent Pluto gas discovery.

Last week, the Pluto-2 confirmation well on Carnarvon basin permit WA-350-P, 190 km off Western Australia, encountered a 63 m gross gas column, suggesting that field reserves could be about 3 tcf of natural gas (OGJ, Aug. 8, 2005, Newsletter).

CEO Don Voelte declared that the company's 100% ownership would enable fast yet rigorous decision-making.

This appears to rule out earlier thoughts that Woodside might suggest a joint project with Chevron Corp., which has a 100% interest in the large Wheatstone gas discovery made in August 2004 just 15 km away on an adjacent permit.

Woodside also seems intent on keeping Pluto facilities separate from the existing LNG plant on the Burrup Peninsula, which it shares with BHP Billiton, BP PLC, Chevron, Mitsubishi/Mitsui, and Royal Dutch Shell PLC. It has earmarked four potential new sites including Onslow, Cape Preston, West Intercourse Island, and a Burrup site where the Western Australian government has already reserved land for Pluto facilities on the Burrup Industrial Estate, several kilometers from the North West Shelf plant.

Voelte says the company is confident it has sufficient gas at Pluto to justify a new plant with a capacity of 5-7 million tonnes/year (tpy) of LNG. A second appraisal well, Pluto-3, is planned for December along with further wells in 2006.

Voelte has set a target to have first LNG supplies on stream by 2010. The schedule calls for front-end engineering and design of the facilities to begin in November this year, leading to a final investment decision in mid-2007.

Woodside is being spurred into action by forecasts of up to 100 million tpy of uncontracted LNG demand in the Asia-Pacific region by 2015. The supply shortfall is likely to start kicking in during 2008-12. Timing of the Pluto development would mesh with this demand scenario.

Woodside says it has had a number of enquiries about Pluto gas from potential buyers in Asia and the US and hopes to make progress on gas sales agreements by yearend.

The Pluto program does not take precedence over Woodside's share of Train 5 at the North West Shelf gas plant or over the company's continuing exploration and potential development of gas reserves in its Bowse basin permits off Broome and Derby off the Kimberley coast of Western Australia by 2012.

Woodside believes that the likely demand in the Asia-Pacific region in the next decade will enable each project to move in parallel and target separate markets.

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