Woodside Explores Gas Supply Options for Pluto, NWS Plants

  • COO Mike Utsler sees LNG supply gap opening by mid-2020s
  • Browse gas could be piped as back-fill for NWS Plant

Woodside Petroleum Ltd. may use gas from both the Scarborough and Browse fields off the nation’s northwest coast to extend the life of the ageing North West Shelf liquefied natural gas plant.

The Browse partners, including Royal Dutch Shell Plc, are considering a range of development options including sub-sea pipelines and floating LNG facilities, Chief Operating Officer Mike Utsler told reporters Tuesday in Karratha, Western Australia.

"The partnership is re-looking at all ideas for how we could best develop” Browse, said Utsler. “North West Shelf is one of the options. It is going to be looked at again."

Australia’s second-largest oil and gas producer scrapped a $40 billion development plan for Browse in March, citing a challenging market, but said at the time it remained committed to developing the project. The company had intended to make an investment decision this half on a floating project for Browse costing a third less than a previous plan involving an onshore plant.

The Perth-based company also confirmed gas from the Scarborough field could be piped to the NWS plant or nearby Pluto LNG project. Woodside agreed earlier this month to a $400 million deal to buy half of BHP Billiton Ltd.’s stake in Scarborough.

There’s now a window to develop stranded gas fields like Scarborough as a supply gap for LNG seen emerging by the mid-2020s will spur a new wave of development, Utsler said. At present, producers are facing headwinds from a global supply glut, which is seen persisting for several more years and has cut prices by as much as 60 percent in the last two years.

"We believe there is going to be a demand versus supply gap that emerges globally for LNG in the mid 2020s," he said. "Thinking about the cycle time, if I approve a project in 2018, 2019 that means it is 3-to-5-to-7 years to build, it is then available to start producing into that demand.”

Before it's here, it's on the Bloomberg Terminal.