Woodside sanctions Scarborough development

Dec. 6, 2021

Woodside Petroleum Ltd. made final investment decisions (FID) for both Scarborough gas field development on the Exmouth Plateau offshore Western Australia and the associated Pluto LNG Train 2 development on the Burrup Peninsula.

The latter includes new domestic gas infrastructure and modifications to Pluto Train 1.

The US$12 billion project which will see Scarborough gas processed through Pluto Train 2 is scheduled to come on stream in 2026.

Woodside said that with the sell-down of 49% of Pluto Train 2 announced earlier this month, the expected investment metrics for the integrated development comprise an internal rate of return above 13.5%, an all-in cost of supply for LNG delivered to north Asia of around US$5.8/MMbtu and a project payback period of 6 years.

Scarborough gas has a minor CO2 content of 0.1%.

The FID has been underpinned by customer support with about 60% of production capacity already under contract, including domestic gas for the proposed Perdaman urea project.

Scarborough will produce up to 8 million tonnes a year (mtpy) of LNG and up to 225 terajoules/day of domestic gas for an initial period of 20 years.

The field is 375 km off the Western Australian coast and is estimated to contain more than 11 tcf of dry gas.

Development plans include the installation of a floating production unit with eight wells drilled during the initial phase and 13 wells drilled over the life of the field. The gas will be transported to Pluto Train 2 through a new 430 km-long trunkline.

Woodside has a 73.5% interest in Scarborough and BHP Petroleum 26.5%. If the Woodside merger with BHP’s worldwide petroleum assets is consummated (expected in second-quarter 2022), Woodside will have control of 100% of the Scarborough development (OGJ Online, Nov. 22, 2021).

On completion of the Pluto Train 2 sell-down, the Pluto Train 2 JV will comprise Woodside 51% and Global Infrastructure Partners 49%.