Photo by: Bloomberg
PERTH (miningweekly.com) – Australian oil and gas producer Woodside has increased the forecast capital investment to develop its Scarborough gasfield from the previous estimate of between $8.5-billion and $9.5-billion to $11-billion.
CEO Peter Coleman told an investor briefing on Wednesday that the increase in expected capital spend came on the back of a increase in the capacity of the second train at the Pluto liquefied natural gas (LNG) plant, from between 2-million and 3.3-million tonnes, to between 4-million and 5-million tonnes.
Woodside has previously flagged plans to accelerate the development of the Scarborough gasfield after increasing its interest in the project to 75% by buying ExxonMobil’s share.
“We are working to unlock maximum value from our existing infrastructure by processing gas from Scarborough through a low-cost expansion of Pluto LNG and Browse through the North West Shelf facilities.
“The progress we are making in Horizon 1 will enable us to develop these projects in time for the expected global LNG supply shortfall in the early 2020s,” Coleman said.
He told investors that market conditions were supporting Woodside’s strategy, with LNG demand growth being higher than most forecasters expected, while development costs were at a low point in the cycle, and there has been a lack of investment in new production.