Burrup Hub shapes up

​​​​​​​​​​​Woodside is set to become operator of the Scarborough Development, advancing its plans for a Burrup Hub. The resource, estimated to hold 7.3 Tcf of dry gas, lies about 300 km off the West Australian coast, within proximity of existing infrastructure.

In February, the company announced its intention to acquire ExxonMobil’s 50% interest in the Scarborough field, growing Woodside’s share to 75%. BHP owns the remaining 25% and retains an option to buy another 10% before the end of next year. It also shares 50-50 ownership of the nearby Thebe and Jupiter fields, also operated by Woodside.

Chief executive officer Peter Coleman says the joint venture is now focused on finalising a development concept for the resource, before beginning front end engineering and design, with a view to making a final investment decision in 2020.

To guide this progress, Daniel Kalms was recently appointed senior vice president of Scarborough and Kimberly Walpot has been named development manager. They are working towards phased development of 12 subsea high-rate gas wells tied back to a semi-submersible platform. That platform would feed back to our onshore Pluto gas plant, which was designed to efficiently accommodate brownfields expansion.

Also looking to leverage synergies is the Browse Development. Incorporating the Torosa, Brecknock and Calliance fields and positioned about 425 km off the coast of Broome, Browse holds an estimated 16 Tcf of dry gas and 466 MMbbl of condensate. Its proposed development concept involves two gas floating production storage and offloading facilities that could feed back to existing Burrup infastracture.

The Browse and North West Shelf (NWS) joint ventures are currently in discussions on a tariff structure for bringing Browse gas through the Karratha Gas Plant. These negotiations are expected to lead to a preliminary agreement before the end of the year with a final investment decision targeted for 2021.

In Woodside’s annual report, the CEO talked of the Burrup Hub as a means to “ensure efficient use of the facilities of the Pluto and North West Shelf Projects, and the timely and cost-effective development of resources. “On the Burrup Hub, Woodside is in the valuable position of having equity in both the gas and the world-class infrastructure to develop it,” he explained. In short, the hub provides low-cost, high-value opportunity for the company and its shareholders.

And the time is right to reap that opportunity. Trends show rising demand for LNG with a supply gap emerging in the early 2020s. This means Woodside needs to act swiftly to ensure its developments are ready to meet that demand.

Plans for a Pluto-NWS interconnector (put simply, a pipeline connection between the two gas plants) are intended to unlock incremental value and add to the potential size of the prize. Studies are now under way to determine whether an interconnector could accelerate Pluto area gas reserves and leverage existing Pluto offshore capacity as well as NWS LNG ullage.

With both Scarborough and Browse developments looming, Woodside is keen to make the most of its infrastructure as it advances both options. Peter Coleman told media that progress on the Burrup Hub concept was a significant turning point in Woodside’s journey. “It puts us on a tremendous growth pathway. We will be a significant player in the new wave of LNG coming into the market,” he said.

Also on the imminent projects agenda is Senegal’s SNE Phase-1 development. Woodside, as development lead, is now progressing detailed concept definition work with the aim of beginning front-end engineering and design in Q4 of this year. The phase one concept involves a stand-alone floating production storage and offloading (FPSO) facility, designed to allow for subsequent SNE development phases. Invitations to tender for the FPSO and supporting subsea facilities have been issued and first oil is targeted for 2022.

Activity in our current growth horizon is clearly ramping up. Woodside has the opportunity to deliver increased production in line with rising oil and gas demand. To support this, an equity raising was announced earlier in the year, a move designed to support the Scarborough acquisition and accelerate efforts to advance our development portfolio. It immediately raised strong support from institutional investors, with 90% of eligible shareholders taking up their entitlements. 

 

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Trunkline Q1 2018​​​​