GAS heavyweight Woodside Petroleum could know within days whether it has enough gas to underpin a $20 billion expansion of its new Pluto LNG project on the Burrup Peninsula.
GAS heavyweight Woodside Petroleum could know within days whether it has enough gas to underpin a $20 billion expansion of its new Pluto LNG project on the Burrup Peninsula.
Woodside this week announced its second successful discovery since a 20-well program to find new reserves for the Pluto project kicked off last quarter.
The discovery of a 300-metre gas column in the Noblige well, about 120 kilometres west of the Pluto platform, follows the discovery of another large gas column in the Eris well in November.
It also comes 11 months after a 110-metre gas column was struck at the nearby Martell well in the same permit as Noblige.
Critically, the results of a fourth well in the greater Pluto region should be known in days. Drilling of the Larsen well, just 10km from Martell, began in late December and should be complete shortly.
The discoveries, for which resource estimates are yet to be announced, are critical for Woodside as it seeks to make a final investment decision on a second LNG production train at Pluto by the end of the year.
It also hopes to approve a third train by the end of 2011, which would help the project’s output double to 9 million tonnes a year by 2013 and treble by 2014.
Current gas reserves at Pluto, which will start production late this year, are sufficient only to support the initial processing train, and Woodside believes an extra 3.7 trillion cubic feet of gas is needed to underpin a second train for 15 years.
Woodside is refusing to comment on the likely size of the Noblige discovery, which local analysts estimate could top 4tcf.
The Noblige discovery comes at a welcome time for Woodside, which was dealt a blow in October when Apache Corporation and Kuwait’s Kufpec Petroleum agreed to process gas from their Brunello and Julimar gasfields through Chevron’s rival Wheatstone project.
Woodside had been negotiating with both companies to underpin the second train at Pluto. But while Woodside wanted to retain up to 90 per cent of its Pluto 2 train, Chevron gave Apache and Kufpec a combined 25 per cent stake in its entire Wheatstone project.
Chevron this week attracted additional customer support for Wheatstone, which is not due to start production until at least 2016, with a deal to supply 800,000 tonnes of LNG a year to Japan’s Kyushu Electric Power Co.
Kyushu will also take a direct 1.83 per cent stake in the Wheatstone fields and a 1.37 per cent stake in the Wheatstone plant.
Kysushu also agreed to buy 300,000t of LNG annually from the $43 billion Chevron-run Gorgon project on Barrow Island.
