Massive $12.5B gas project over two-thirds done as Saipem puts in ‘critical piece of infrastructure’ offshore Australia

Australian energy player Woodside is continuing to make inroads in developing its giant energy project off the coast of Australia. The latest achievement, concerning an export trunkline installation at this natural gas project, took around a year to be finished, however, Italy’s Saipem has now wrapped up the work. As a result, the pre-commissioning of the trunkline in preparation for the hook-up of the subsea infrastructure will now begin, bringing the $12.5 billion project closer to the first liquefied natural gas (LNG) cargo slated for 2026.

Woodside has confirmed that its Scarborough energy project, which was 67% complete at the end of June 2024, is now more than two-thirds ready, as Saipem has completed the trunkline installation after around 12 months, 433 kilometers, and more than 36,000 lengths of pipe at depths of up to 1,400 meters.

At the end of January 2024, Saipem revealed an incident on the Castorone pipelay vessel during normal pipelaying operations offshore Australia, but the incident did not cause injuries to personnel or any major damages to the ship, however, localized damage to the trunkline was reported. In mid-February, the Italian player got NOPSEMA’s nod to restart Castorone operations.

When operational, the 433 km trunkline will transport gas from the offshore Scarborough field to the onshore Pluto LNG processing facility in Karratha, helping to meet demand for the lower carbon and reliable energy the world needs today and into the future, according to Woodside.

The delivery of the first LNG cargo is expected in 2026, generating more than A$50 billion ($33.43 billion) in direct and indirect taxes for Australia’s economy, over 3,000 jobs during the construction phase, and creating or sustaining almost 600 jobs on average during operations.

While highlighting that the trunkline was “a critical piece of infrastructure” for the Scarborough energy project, requiring installation by specialized vessels and expert teams, Liz Westcott, Woodside Executive Vice President & Chief Operating Officer Australia, emphasized: “The completion of installation is a significant accomplishment, reflecting the dedication of all involved in achieving this project milestone.

“With the last components of the trunkline in place, the focus will be maintained on safely executing the remaining project scopes to support the targeted first Scarborough LNG cargo in 2026. The Woodside, Saipem and sub-contractor teams are to be congratulated on their outstanding delivery of this key element of the project.”

Woodside recently sealed a deal with the Australian Conservation Foundation (AFC) to end a two-year legal challenge regarding a primary environmental approval for the project. Located 375 km off the Pilbara coast of Western Australia, the Scarborough gas project in the Carnarvon Basin entails new offshore facilities connected by an approximately 430 km pipeline to a second LNG train at the existing Pluto LNG onshore facility.

All wells will be tied back to a semi-submersible floating production unit (FPU) moored in 950 meters of water close to the Scarborough field. As the total project cost estimate recently increased to $12.5 billion, representing $8.2 billion as the Australian player’s 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.

Woodside has taken steps to increase its LNG portfolio as illustrated by the completion of the acquisition of Tellurian and its Driftwood LNG development opportunity in Louisiana. This acquisition is described as a significant new chapter for the company, reinforcing its position among top independent LNG players.

The LNG project, perceived as a competitively advantaged, fully-permitted, pre-FID development opportunity, has been renamed Woodside Louisiana LNG, as it becomes part of the Woodside portfolio.