Woodside has outlined plans to develop three floating LNG projects off the Kimberley coast, with each likely to be similar in scale to Shell’s $12 billion Prelude development.
Announcing a solid 7 per cent rise in net profit today, chief executive Peter Coleman said he expected Woodside’s joint venture partners – including Shell, PetroChina, Mitsubishi and Mitsui – to support the proposed FLNG development.
“We are very aligned as a joint venture,” he said.
“We feel quite confident that we will get approval.”
One day after Premier Colin Barnett attacked Woodside for failing to pursue an onshore LNG development at James Price Point, Mr Coleman said the company shared the premier’s disappointment.
“Unfortunately it’s just not commercially attractive,” Mr Coleman told journalists today.
Woodside is aiming to make a final investment decision on its first FLNG development in mid-2015, with the others to follow after 15-month intervals.
The Perth-based company’s projects will operate with Shell’s FLNG technology, which is being used for the first time in the Prelude development.
Prelude has a capital cost of $12 billion and will have annual production of 3.6 million tonnes.
Based on Shell’s ‘design one, build many’ plan, Mr Coleman expected Woodside’s FLNG vessels would be similar to Prelude, though he noted they may have less processing technology on board.
The three FLNG vessels will service the three gas fields that make up the Browse project – Torosa, Brecknock and Calliance.
Mr Coleman played down the risk of the state government refusing to renew its two retention leases, which cover part of the Torosa field.
“The volume of reserves under those leases are quite small,” he said.
The federal government has already agreed to renew the leases in Commonwealth waters, which cover most of the gas reserves.
Woodside’s half-year results featured a 7 per cent increase in net profit to $US873 million, mainly due to strong production from its Pluto LNG plant.
The company produced a record 41.9 million barrels of oil equivalent (mmboe) during the six months, an increase of more than 22 per cent compared to the same time last year.
Woodside is targeting full-year production from 85-89mmboe this year.
Mr Coleman said the increased production had lifted revenue and the company was now focused on improving margins.
“Our focus now is to enhance margins and build on the value provided by the base business,” he said.
Mr Coleman said the company was continuing to pursue new growth opportunities in Israel, Ireland and Myanmar, but had little news to add on those fronts.
Locally, it has outlined several smaller projects, including development of its Xena gas field (to supply Pluto) and potentially the North West Shelf Venture’s Persephone field.
Woodside will pay a fully franked half-year dividend of US83 cents per share, up from US65 cents for the same period last year.
It also paid shareholders a special dividend of US63 cents at the end of May.