How far have Woodside’s incoming oil & gas and renewable projects come?

Australia’s energy giant Woodside is laying out the groundwork to develop and bring several energy projects online – including oil and gas, low-carbon, and renewable ones – in a bid to scale up production. While the firm notched up milestones for most of these projects, one still run into delays, which threw a spanner in the works and derailed the previous timelines, upping the project’s total estimated costs.

According to Woodside, its production decreased in 2Q 2023 compared to the prior quarter to 44.5 MMboe, primarily due to the planned major turnarounds on Pluto LNG – production recommenced in June 2023 – and the FPSO Ngujima-Yin, which completed a planned five-year maintenance turnaround in a Singapore drydock with production expected to restart in July 2023.

The decrease in production during 2Q 2023 was partly offset by seasonal demand from Bass Strait and higher production from BP’s Mad Dog 2, following the first production from the Argos platform in April 2023. Woodside is hard at work on several energy projects, which are expected to increase its production and help meet its energy security and sustainability plans.

The final investment decision for the Scarborough project was made in November 2021. Once April 2022 rolled in, Woodside received key primary approvals from the Commonwealth-Western Australian Joint Authority to support the execution of the project. This development was 38 per cent complete at the end of the second quarter of 2023. The upstream pipeline manufacturing is now complete, with pipeline coating ongoing while the ramp-up of the floating production unit (FPU) fabrication for both the topsides and hull continued.

The development of the Scarborough field, located in the Carnarvon Basin, approximately 375 km off the coast of Western Australia, and estimated to contain 11.1 trillion cubic feet of dry gas, will feature up to 13 subsea production wells to be tied back to floating platform moored in a water depth of 900 metres.

While progress was made on Pluto Train 2 module fabrication and foundation site works with the construction accommodation village complete, Pluto Train 1 design activities and market engagement for long-lead items continued. The Western Australian regulator accepted the Scarborough trunkline installation environment plan and Woodside confirms that engagement with NOPSEMA continued regarding Commonwealth environment plans.

The Pluto Train 2 project was 38 per cent complete at the end of 2Q 2023. This will be the second LNG train at Woodside Energy’s existing Pluto LNG onshore facility and will process gas from the Scarborough development. The construction site for the train is within the existing Pluto LNG boundary. The first LNG cargo is targeted for 2026.

Meg O’Neill, Woodside CEO, commented: “The Scarborough and Pluto Train 2 project continued to make good progress and is now 38 per cent complete. Fabrication of both the topsides and hull of the floating production unit has ramped up. The accommodation village in Karratha, which will service the Pluto Train 2 construction workforce, is now complete. Pluto Train 2 module fabrication and foundation site works are progressing well.”

The Sangomar field development Phase 1 project in Senegal was 88 per cent complete at the end of 2Q 2023, with 12 of 23 wells drilled and completed while the floating production storage and offloading (FPSO) topsides integration and pre-commissioning works continued in Singapore. The project, which was sanctioned in January 2020, is targeting approximately 230 million barrels of crude oil.

The construction phase for the FPSO was completed in China, after Woodside awarded the contract for the supply of the FPSO, named after Senegal’s first president, Leopold Sédar Senghor, for the project to MODEC. The FPSO was relocated to Singapore to complete topsides integration and pre-commissioning.

Previously, the first oil was anticipated in late 2023, however, this is now slated for mid-2024. The total project costs have risen to $4.9 – 5.2 billion, a jump of 7-13 per cent from the previous cost estimate of $4.6 billion due to unexpected remedial work being required on the FPSO.

While the development drilling programme continues, one of Diamond Offshore’s drillships completed its work scope in July and the remaining drilling activity will be completed by another one of its drillships. The subsea installation campaign was 76 per cent complete, with the overall subsea work scope 95 per cent complete at the end of the period.

“We conducted a cost and schedule review at Sangomar following the identification of remedial work required on the FPSO. We have taken the prudent decision to conduct the remedial work while the FPSO remains at the shipyard in Singapore. This minimises the impact on the project schedule as it is safer, more efficient and more cost effective than undertaking the work offshore Senegal,” added O’Neill.

Woodside previously delayed the FID from 2022 until 1Q 2023 for the Trion project in the Perdido basin in the Gulf of Mexico located 30 km south of the Mexico-U.S. maritime border. However, the FID to develop the Trion resource in Mexico was not revealed until June 2023. The development of this project remains subject to regulatory approval of the field development plan (FDP).

Following Woodside’s approval, the joint venture approved the FDP, which was submitted to the regulator and approval is expected in 4Q 2023. The Australian player explains that long-lead orders were placed for the FPU topsides rotating equipment while the FPU engineering, procurement and construction contract was executed with Hyundai Heavy.

The first oil is targeted for 2028 and the forecast total capital expenditure is $7.2 billion. Trion is expected to have a carbon intensity of 11.8 kg CO2-e/boe over the life of the field. The development of this project entails the installation of an FPU, an FSO, and 18 wells – nine producers, seven water injectors, and two gas injectors – drilled in the initial phase, with a total of 24 wells drilled over the life of the project.

“We also achieved an important step towards value-accretive investment in future growth, taking a final investment decision to develop the Trion oil field offshore Mexico, subject to the regulator’s approval of the field development plan which is expected in the fourth quarter of this year. Trion is expected to deliver shareholder returns which exceed Woodside’s capital allocation framework targets following its forecast start up in 2028,” elaborated O’Neill.

Aside from oil and gas projects, Woodside is pursuing low-carbon and renewable projects to bring more sustainable sources of energy to life. One of the projects which is expected to assist the firm in achieving this is H2OK, a liquid hydrogen production facility proposed for the Westport Industrial Park in Ardmore, Oklahoma.

The first phase of the project involves the construction of an initial 290-megawatt (MW) facility, producing up to 90 tonnes per day (tpd) of liquid hydrogen through electrolysis, with potential expansion to 550 MW and 180 tpd.

The Australian firm claims that progress was made in contracting activities for the plant construction scope and other schedule-critical packages during the second quarter of 2023. The company bought 94 acres of land in the Westport Industrial Park in Ardmore, Oklahoma, for the proposed H2OK facility.

Back in October 2022, the company hired Nel Hydrogen Electrolyser, a subsidiary of Norwegian hydrogen company Nel, to provide the alkaline electrolyser equipment for the project, disclosing that the front-end engineering design (FEED) for the project was targeted for completion in 2022. Woodside is targeting final investment decision readiness for H2OK in 2023.

Woodside is also pursuing ways to expand its footprint in emerging energy sectors in the U.S. while working on two proposed hydrogen projects in Australia: H2Perth and H2TAS. Regarding the first one, the company awarded the contract for the engineering and fabrication of the hydrogen production equipment and submitted Western Australian environmental approval application documents. The Commonwealth environmental approval application documents were submitted subsequent to 2Q 2023.

Woodside disclosed plans to establish a world-scale hydrogen and ammonia production facility at a site in southern metropolitan Perth in 2021, thus, the H2Perth project aims to produce low-cost, low-carbon hydrogen-based energy; stimulate and enable increased renewable power generation in Western Australia; and support State Government priorities for strategic industry creation and local manufacturing.

Hydrogen is not the only decarbonisation tool in Woodside’s energy transition arsenal, as the firm is also pursuing solar projects. In line with this, the company set its cap on the supply of approximately 50 MW of solar energy to the Pluto LNG facility, which would directly reduce Scope 1 greenhouse gas emissions from Pluto. The company has now completed the solar electrical tie-in scope at the Pluto LNG facility during the 2023 Pluto shutdown. The firm is targeting final investment decision readiness in 2023.

The Australian player plans to supply this solar energy through the Horizon Power-operated section of the North West Interconnected System (NWIS) to its customers connected to the NWIS. With this in mind, the Australian giant previously entered into a bilateral indigenous land use agreement and a modern benefits-sharing and relationship agreement with the Ngarluma Aboriginal Corporation (NAC) and executed an option to lease the land while progressing NWIS connection and transmission access arrangements.

Every 100 MW of solar electricity supplied to customers connected to the NWIS is expected to reduce greenhouse emissions by 100 kt per annum and curb emissions of other pollutants, such as nitrogen oxides and sulphur oxides. This is subject to various factors, such as a customer’s existing electricity source and demand profile.

Woodside is not only interested in developing a solar photovoltaic power facility, approximately 15 km southwest of Karratha in Western Australia, but also progressing plans with Heliogen for a 5 MW commercial-scale demonstration facility in California, using Heliogen’s AI-enabled concentrated solar technology.

The Australian player confirms that a final investment decision was made on the Julimar-Brunello Phase 3 project in April 2023. This project involves the drilling of up to four development wells in the Julimar field and the installation of subsea infrastructure to connect to the existing Julimar field production system (FPS).

Woodside Energy is the operator of the Julimar FPS, located in Commonwealth waters about 160 km northwest of Dampier and adjacent to the Chevron-operated Wheatstone platform. The Julimar and Brunello fields supply about 20 per cent of the total raw gas demand to the Wheatstone project while the remaining gas is provided by the Chevron-operated Wheatstone and Iago fields.

Wheatstone is said to be one of Australia’s largest resource developments and its first LNG hub with two LNG trains with a combined capacity of 8.9 million metric tons per annum (MTPA) and a domestic gas plant. The first shipment of LNG took place in October 2017. Chevron acts as the operator, while the other stakeholders are KUFPEC, Woodside, Kyushu Electric Power, and JERA.

Furthermore, Woodside started the commercial tender process for decommissioning a number of facilities within the Gippsland Basin and continued plug and abandonment of wells that are no longer producing. The company progressed front-end engineering design work on Phase 1 of the South East Australia carbon capture and storage (SEA CCS) project during 2Q 2023. This project aims to use existing infrastructure to store CO2 in the depleted Bream field off the coast of Gippsland, Victoria.

In the Gulf of Mexico, an appraisal well, SWX4, was drilled in the southwest part of the Mad Dog field and an extension of the current development through a multi-well tie-back to Argos is being evaluated. As the second of two wells was completed on the Shenzi North project, subsea work is ongoing with the first of three subsea installation campaigns completed, installing manifolds and high-integrity pressure protection system packages. The project was 82 per cent complete at the end of the period.

In addition, the Australian firm explains that the Enfield P&A campaign continued with four wells permanently plugged and three xmas trees removed. The plugging of 13 out of 18 Enfield wells and removal of 16 out of 18 xmas trees has been completed.

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