Gauntlet down in pipe plan
Woodside Petroleum chief executive Peter Coleman has turned up the heat on Chevron and other North West energy players to get the next wave of LNG projects under way.
He used the company’s annual investor briefing last Wednesday to push for deals on a shared pipeline in the Carnarvon Basin and a North West Shelf tolling agreement that would clear a hurdle for the long-delayed Browse project.
The move came as he unveiled plans for an enlarged $US11 billion ($14.5 billion) Scarborough gas development involving the construction of a second train at the Woodside-operated Pluto LNG plant.
Without mentioning Chevron by name, Mr Coleman said Woodside had been in discussions with a major resource owner for nearly a year about opportunities in the Carnarvon Basin. “They know what they need to do,” he said. The tensions between the two companies surfaced at a recent oil and gas conference, when Chevron Australia managing director Nigel Hearne presented a shared trunkline concept in the region where Woodside plans to pipe Scarborough gas. “If they’re willing to come along and pay me some money to make a pipeline larger and so forth, we’re very open to that,” the Woodside boss said last week. “They’ll need to have pretty mature commercial terms in place already.”
He told investors any deals would have to be struck by the September quarter, several months before Woodside began front-end engineering design work on Scarborough.
A map of the proposed trunk-line showed a route with tie-in opportunities that could include Western Gas’ Equus project and other fields in which Chevron and Shell were among permit holders.
Mr Coleman has also claimed there was one hold-out among the six North West Shelf partners, believed to be Chevron, on agreeing to a tolling structure. However, it is understood negotiations are continuing with several parties.
The tolling would enable Browse gas off the Kimberley to be piped 900km to the Karratha Gas Plant. Woodside is working to a June deadline for the deal.
Mr Coleman warned offshore resource owners looking to backfill the North West Shelf project against missing out. “Bring forward your best offer. Make sure it’s ready,” he said. “At the moment, Browse is a clear leader.”
Woodside’s updated Scarborough plan has a cost at least $1 billion more than previously forecast because of a rise by two million tonnes per annum in upstream capacity to 9Mtpa. A second production train would be built at the Pluto plant with a capacity of 4.5Mtpa, putting it on a par with the first train, which processes gas from the Pluto project.