MELBOURNE, June 24 -- Woodside Petroleum Ltd. has reported another project development cost overrun as well as an added delay to the start-up of its Pluto LNG project in Western Australia.
The company has added a staggering $900 million (Aus.) to the cost of the development bringing the sum to $14.9 billion (Aus.), representing a total cost overrun of 24% since the original final investment decision.
In addition, the project’s first cargo of LNG is now timed for March 2012 instead of in September.
Woodside says the delay and cost increases are due to slower than expected progress in commissioning the onshore gas plant on the Burrup Peninsula and 7 weeks of delays caused by bad weather, notably cyclones and heavy rain in the Pilbara region of Western Australia.
Resultant poor sea states have hindered completion of critical subsea work while a mechanical fault experienced with a contractor’s installation support vessel has exacerbated matters.
Woodside has expressed disappointment at the delays, but says Pluto is a 20 plus-year project and once deliveries of LNG begin next year, the delays will be forgotten.