The provision of domestic gas to customers in Western Australia has long been a core part of Woodside’s business and is something we take very seriously.
From next year we will also be offering domestic LNG – a new way to deliver domestic gas to remote mine sites and communities in the state’s north, so those who have not had the benefits of pipeline gas can secure access to this highly reliable, cost-effective and clean energy source.
Our LNG truck-loading facility at the Pluto LNG plant will be ready to start operating in 2019, extending a “virtual pipeline” to connect remote mine sites and other industrial customers to LNG supply. We are already in detailed discussions with a number of customers.
This is about a long-term commitment to provide resources from Western Australia to local customers who have previously not had access to domestic gas. For more than 30 years, Woodside has been supplying gas to the WA market through the North West Shelf.
Now we see an opportunity to put further gas resources into the domestic market by offering it as a fuel for remote power generation and potentially for both land-basedand marine transport.
To do this, we are working with other key industry players to provide the logistics infrastructure to deliver LNG reliably and safely throughout the Pilbara, Kimberley and Gascoyne areas, extending as far south as Geraldton and all the way to Wyndham.
The extensive mining operations in WA are the perfect place to lead the transition to LNG as a fuel for power generation and even heavy transport, with Woodside’s worldclass Pluto LNG Plant close to industries that are heavy energy users.
For Australia, there are obvious environmental benefits. Around 3 billion litres of diesel are imported into the North-west each year, with more than two-thirds of it going into mining operations. Switching from diesel to Pluto LNG for power generation can reduce greenhouse gas emissions by 27%, achieve a reduction in sulphur and particulate emissions in excess of 95% and significantly reduce nitrous oxides emissions.
LNG is also extremely competitive on price with diesel.
The immediate opportunities are primarily around power generation at remote sites. Businesses and communities looking for off-grid options will have access to LNG as a stand-alone fuel but also as a reliable baseload power source to complement renewable sources. In the medium term we are also working with industry on options for LNG to displace diesel as a fuel for heavy mining vehicles and pit-to-port transportation of resources. LNG has been successfully incorporated into similar applications overseas, including in North America and Europe, and Woodside is confident that by developing reliable supply of domestic Pluto LNG we can develop a significant market for LNG as a primary source of energy.
We are also committed to developing LNG as a marine fuel. Woodside has led the way with our own marine support vessel, the Siem Thiima, which will be the first customer to be fuelled by LNG supplied from the new Pluto truck-loading facility. Demand for LNG as a marine fuel is expected to grow ahead of 2020, when the International Maritime Organisation’s tighter global restrictions on the sulphur content of shipping fuels will take effect.
In readiness for this, Woodside is putting in place the bunkering infrastructure to allow vessels operating from the busy export ports of northern WA, including iron ore carriers, to convert to LNG fuelling. Over the past two years, we have worked with key industry players through the Green Corridor Joint Industry Partnership to finalise the design and accreditation of commercially viable LNG-fuelled bulk carriers. The resulting vessel designs incorporate LNG fuel tanks large enough to support two round trips from WA to China.
Woodside is committed to developing these opportunities for using LNG from Western Australia to power the state’s regional industries and fuel their exports. In doing this, we hope to reduce emissions in our own backyard while laying the groundwork for a new market for LNG, with environmental and economic benefits for the nation.
