02/06/2009 - 10:19

Woodside proposes 11 LNG trains

02/06/2009 - 10:19

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Woodside Petroleum says there is potential to build another five liquefied natural gas (LNG) processing trains on the Burrup Peninsula, doubling the size of what is already Australia's most valuable resources precinct.

Woodside Petroleum says there is potential to build another five liquefied natural gas (LNG) processing trains on the Burrup Peninsula, doubling the size of what is already Australia's most valuable resources precinct.

Speaking at a gas industry conference in Darwin today, Woodside chief executive Don Voelte called on the industry to expand existing infrastructure and consolidate a proven LNG precinct.

The Burrup is home to the Woodside-operated North West Shelf venture, which has built five LNG trains over the past two decades, and the Woodside-owned Pluto LNG project, currently under construction.

"Between Pluto and the North West Shelf venture we have the opportunity to construct an additional five LNG trains," Mr Voelte told the conference.

"That is an 11 train vision - a truly world class facility and arguably one that can offer the lowest unit cost of production for a significant share of the Carnarvon Basin resource."

Chevron Australia managing director Roy Krzywosinski put forward an alternatve vision, based on development of Chevron's Gorgon LNG project on Barrow Island and its Wheatstone project at Onslow.

He said the Wheatstone project has the potential to anchor and facilitate the economic development for, not only the Wheatstone field, but other nearby gas fields.

"Bringing Wheatstone onsteam is imperative to unlocking this potential in the West Carnarvon basin," Mr Krzywosinski said.

Woodside has acknowledged that it will need to buy gas from third parties before it can proceed with further processing trains at Pluto; one option it had considered was gas from the Wheatstone field but that now seems unlikely.

Woodside announced last month it was in talks with US-based Apache Corp to buy gas from Apache's Julimar prospect to supply Pluto 2.

"We continue to discuss supply options with owners of third party gas in the area, and maintain our own exploration program in order to proceed with Trains 2 and 3," Mr Voelte told the Darwin conference.

Woodside's future LNG output would exceed Chevron's if it retained 90 per cent equity in Pluto Train 1 and 50 per cent in the second and third trains, he said.

"If Woodside's equity in Trains 2 and 3 turns out to be more than than 50 per cent, then it's even better," Mr Voelte said.

First gas from Pluto 1 remains on track for the end of next year.

Mr Voelte reiterated his opposition to the Carbon Pollution Reduction Scheme in its current form, saying it "could constrain Australian LNG exports at a time when the industry is already lagging behind its international competitors".

Shares in Woodside were up $1.03, or 2.34 per cent, at $45.05 at 1159 AEST.

 

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