Woodside Energy continues to target first LNG production from its Scarborough project by 2026, despite recent regulatory setbacks and opposition from sections of the community.
Woodside Energy continues to target first LNG production from its Scarborough project by 2026, despite recent regulatory setbacks and opposition from sections of the community.
Scarborough’s setbacks and regulatory environment concerns were a key focus in questions from analysts at the company’s investor briefing on the east coast this morning.
Conditional environmental approval of seismic surveying granted to Woodside by the National Offshore Petroleum Safety and Environmental Management Authority was overruled by the Federal Court at the end of September.
Analysts from Goldman Sachs and Citi had tipped a six-month delay to 2027 for the globally significant LNG project of the WA coast, but chief executive Meg O'Neill backed Woodside’s existing schedule.
Ms O'Neill consistently pointed to construction progress on the floating production unit as the critical path to delivery at Scarborough. The facility is currently at 50 per cent completion.
Woodside plans to process gas from Scarborough via the Pluto processing plant, and fabrication work on the plant’s second train is underway in Indonesia.
“I appreciate the market would like to have greater detail, but the reality is our project teams are very good at adapting to things that change,” she said.
“If we get to the point where we have something that we need to notify the market of when it comes to cost or schedule impact, we will do so, but we’re not at that point yet.
“We are still on track for 2026 first LNG.”
Approvals have been a point of contention for gas developments across the country recently, with Santos last week temporarily blocked from beginning pipeline works at its $US4.7 billion Barossa project.
Ms O'Neill said Woodside was working closely with regulators to understand what she described as a rapidly changing environmental approvals process.
Woodside currently has four environmental plans with the regulator.
“We do believe that we as an industry and we as Woodside have greater clarity on what’s required in terms of both executing the consultation and documenting it for NOPSEMA,” she said.
Scarborough, alongside the Sangomar project off the coast of Senegal and the Trion project in the Gulf of Mexico, were singled out as world-class projects in development.
Sangomar is expected to achieve first oil in 2024, with Trion working towards the milestone in 2028.
Conspicuous in its absence from the presentation was the Browse LNG project off WA’s coast – the nation’s largest untapped conventional gas resource.
Ms O'Neill said the company was taking a measured approach to Browse’s development.
She said the project’s progression would require a carbon solution, environmental approval clarity and commercial processing agreements to process gas through the North West Shelf facility.
Carbon capture is being explored at Browse and the depleted Angel field, and the joint ventures at North West Shelf and Browse are progressing tolling arrangements.
However, state and federal approvals are still in progress.
“We continue to work with the commonwealth and state governments on environmental approvals,” she said.
“We continue to try and move them forward, but it is a bit of a challenging environment.
“From the perspective of being sensible with our deployment of shareholder funds, we are being very measured with Browse to make sure we don’t ramp up engineering ahead of resolving these critical matters.”
Overall, Woodside remains bullish on the outlook for LNG as part of the world’s energy mix.
Ms O'Neill said the company’s strategy of delivering energy projects while progressing its new energy ambitions in hydrogen and carbon capture was also its climate strategy.
“We don’t have two separate strategies, climate considerations are incorporated into our decision-making processes,” she said.
The H2OK project is the company’s most advanced hydrogen development in Oklahoma. Woodside said it was progressing well while clarifying the terms of the US Inflation Reduction Act.
The company said its efforts to build carbon capture into its business as a decarbonisation measure and a service offering had the potential to store more than 3 million tonnes of carbon by 2030.
Woodside shares traded 0.7 per cent lower at 10am WST.
