PERTH (miningweekly.com) – Oil and gas major Woodside is committed to the development of the Scarborough gasfield, offshore Western Australia, despite the tumbling oil prices and the volatile price environment for liquefied natural gas (LNG).
Reports emerged last week that the $11.4-billion project could be delayed as the coronavirus continued to rage on a global level, the oil price tumbled to its lowest level since the 1991 Gulf War and LNG prices fell on the back of a glut of supply in Asia.
“We are continuing to work collaboratively with BHP towards a final investment decision in 2020. We think our projects are resilient to low oil price outcomes – we test for that throughout our key planning processes. While we consider short-term price fluctuation, we make final investment decisions on long-term forecasts,” a spokesperson for Woodside told Mining Weekly on Wednesday.
BHP in February announced its decision to progress the Scarborough development into a feasibility study phase, saying the decision was consistent with the company’s petroleum strategy to invest in advantaged gas.
The project will be submitted to the BHP board for a final investment decision from the middle of the 2020 calendar year. First LNG is targeted for 2024.
Meanwhile, Woodside said that a hunt for a development partner for Scarborough continued.
CEO Peter Coleman said during the company’s annual results in February that the sell-down of a stake in the Scarborough field would continue, with Woodside opening up a data room to potential investors.
“We expect that process to complete around the middle of the year. We don’t expect any binding agreements to be completed by then, but we expect certainly a line of sight to potential sell down,” he said at the time.
Woodside in January this year reported a 52% increase in the resource volume at the Scarborough field, from 7.3-trillion cubic feet to 11.1-trillion cubic feet.