Woodside’s $12.5 billion giant gas project coming along nicely with over two-thirds of work done

While project costs have risen, Australia’s energy giant Woodside has made strides in bringing to life its huge gas project off the coast of Western Australia, thus, the first liquefied natural gas (LNG) is still on track to be achieved in 2026.

Located 375 km off the Pilbara coast of Western Australia, the Scarborough gas project in the Carnarvon Basin, which targets the first LNG cargo in 2026, was 67% complete at the end of the second quarter of 2024. This development entails new offshore facilities connected by an approximately 430 km pipeline to a second LNG train at the existing Pluto LNG onshore facility.

As a result, the project encompasses the installation of a floating production unit (FPU) with eight wells drilled in the initial phase and thirteen wells drilled over the life of the gas field. All wells will be tied back to a semi-submersible FPU moored in 950 meters of water close to the Scarborough field.

While the schedule remains unchanged, following a review, the total project cost estimate has increased to $12.5 billion, representing $8.2 billion Woodside share, for the integrated Scarborough energy project. This is a 4% jump from the previous cost estimate of $12 billion when a final investment decision (FID) was disclosed in November 2021.

Woodside pinpoints the scope maturation of the Pluto Train 1 modifications project as the main culprit for the cost hike. Out of 51 modules required for the Scarborough project’s Pluto Train 2, 29 have been delivered to the site, with 25 modules set in position at the end of the quarter.

The Australian firm has confirmed the progress in fabricating the FPU hull and topsides, with the living quarters module installed on the topsides, achieving structural completion. The firm emphasizes that the trunkline installation has transitioned from the 36” to 32” pipe and is now more than 50% complete.

While two development wells have been drilled, only one is completed and the other is slated to be done in H2 2024. The reservoir quality is said to be aligned with pre-drill estimates. The installation and testing of the three flowlines were wrapped up.

Furthermore, the operator underlines that all major engineering reviews for the Pluto Train 1 modifications have been completed, with around 80% of materials and equipment being ordered. As a result, the mobilization of personnel got underway at the module yard and Pluto site.

Woodside, which secured $1 billion in funding from Japan Bank for International Cooperation (JBIC) for the Scarborough development, claims that the project will contribute an estimated $19 billion in direct taxes and is anticipated to spend $90 million with local Karratha businesses, providing thousands of jobs.

Meg O’Neill, Woodside’s CEO, underscored: “We see ongoing demand for Woodside’s LNG in Asian markets, as evidenced by our long-term sale and purchase agreement with CPC Corporation, Taiwan, and the $1 billion loan agreement executed with JBIC to fund Woodside’s Scarborough energy project.”

Woodside recently took steps to enrich its LNG portfolio by bringing Tellurian into its fold and taking over the latter’s ownership and operatorship of a proposed 27.6 mtpa LNG terminal in Louisiana, United States.