18/01/2021 - 15:29

Scarborough offtake deal doubled

18/01/2021 - 15:29

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Woodside has doubled a supply contract for its proposed Scarborough project, following a record year for Australian production and LNG prices hitting highs.

Scarborough offtake deal doubled
The Pluton LNG facility will be expanded to process Scarborough gas under the planned development. Photo: Woodside

Woodside has doubled a supply contract for its proposed Scarborough project, following a record year for Australian production and LNG prices hitting highs.

Uniper Global Commodities and Woodside Petroleum signed a deal for Scarborough gas in September 2019, with supply expected to commence in 2021.

That was for 500,000 tonnes of LNG annually until 2025, when it would rise to 1mtpa.

Today, Woodside announced it had amended the terms, and would ship 1mtpa from 2021 to 2025 with a further 2mtpa from 2026.

But most of the supply from 2025 and beyond would be contingent on the Scarborough project proceeding, with a final investment decision likely later this year.

Woodside chief executive Peter Coleman said the deal showed progress towards a green light for Scarborough.

“Scarborough is a globally competitive, capital efficient LNG development, which supports the decarbonisation ambitions of our customers,” he said.

“We expect the timing to be right for final investment decisions on Scarborough and Pluto train 2 in the second half of this year.

“This agreement with Uniper highlights the strong market demand we are seeing for Scarborough LNG as customers consider their energy requirements from the second half of this decade. 

“We have now secured long-term customers for over 40 per cent of our expected Scarborough equity production.

“Woodside and Uniper share a commitment to innovatively deliver a lower-carbon future.” 

Consultancy EnergyQuest said Australian LNG exports hit 78mt in 2020, up slightly from 77.5mtpa.

Western Australia’s production was 43.7mt, up 5 per cent.

That was despite Shell’s Prelude floating facility being offline for most of the year, and Chevron’s issues with maintenance at its Gorgon Plant.

Despite the rise in production, national LNG export revenue fell about $12 billion to be $36.1 billion in 2020, the report said.

Prices were low during the COVID-19 shock, but recovered towards the end of the year.

“The Platts JKM fell to its lowest price ever of $US1.83/million British Thermal Units on April 29 and hovered at a low level for several months, before skyrocketing more than eight-fold in the closing stages of December, to a more than six-year high of $US15.10/MMBtu on December 31,” EnergyQuest said.

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