Woodside Petroleum has told shareholders that it plans to substantially increase its exploration spending and seek new partnerships, despite plunging prices caused by a gas glut in the United States .
Australia's top oil and gas play revealed at its annual general meeting that its $14.9 billion Pluto project had begun shipping liquefied natural gas (LNG) on Monday.
That makes it Australia's third LNG producing project, along with Woodside's North West Shelf Venture and Darwin LNG project.
Another seven large Australian LNG schemes are under construction in Western Australia and Queensland.
The suite of Australian projects is banking on rising demand for LNG in Asia but an oversupply in the US has led to the price for 1000 cubic feet of gas there plunging from $US13 ($A12.62) to about $US2 ($A1.94).
Woodside chairman Michael Chaney pointed out that it was still difficult economically for US producers to convert gas to LNG and it ship to Asia.
However, energy analysts have argued that even allowing for the cost, gas could still be delivered to Asian locations such as Korea for cheaper than the current Asian prices near $US16 ($A15.53) per gigajoule.
"We believe healthy prices are likely to be maintained for some time but no one would guarantee it, the world is full of surprises," Mr Chaney said.
"We think we're well positioned with the assets we've got and the facilities that produce LNG to produce it to maintain a pretty healthy level of earnings.
"We are not resting on our laurels now that LNG production has started.
"We are already identifying opportunities to optimise value from Pluto, continuing our exploration campaign and talking with other resource owners to support additional trains."
Demand in the Asia Pacific for LNG is set to double by 2025 driven by both the region's economic growth and the popularity of gas as a cleaner energy source than oil or coal.
As well as kickstarting Pluto, Woodside has had a good week in which it also announced it had struck a $2 billion deal to sell part of its stake in the Kimberley Browse gas project to Japan's Mitsubishi Corporation and Mitsui & Co (MIMI).
After a question from a project opponent, Mr Chaney would not say whether Woodside would bow to pressure from Kimberley residents or its joint venture partners to switch plans for a processing plant from James Price Point to Karratha, which is further away from the field.
Analysts liked the sell-down from 46 per cent to 31.3 per cent.
Morningstar's Mark Taylor said the sale of the stake reduced risk for Woodside and aligned interests between the joint venture and MIMI, also a participant in the North West Shelf.
Woodside shares closed up 46 cents at $36.66.
