Pluto LNG Production Plant in Australia Ready for Start-up

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Researched by Industrial Info Resources Australia (Perth, Australia)--Woodside Petroleum's (ASX:WPL) (Perth, Australia) Pluto liquefied natural gas (LNG) project has reached ready-for start-up (RFSU) status, but it is late in delivering the first cargo of LNG as per Woodside's schedule. Woodside reached RFSU status on March 22, 2012, when the first gas began to flow through the 4.3 million-metric-tonne-per-year nameplate capacity processing train. 2012 will see LNG produced at between 1.8 million and 2.2 million metric tonnes per annum.

Woodside regrettably informed shareholders and the wider public in June of last year that Pluto would not be supplying LNG to the market as per the original schedule, but promised to deliver by the end of March 2012. The final delay has cost Woodside $165 million, adding to the total investment value (TIV) of $14.9 billion. Woodside has fallen further behind on reaching the March target for first LNG production and delivery. It is anticipated that the first LNG tanker to depart from the Burrup Peninsular with Pluto LNG will be in April.

Woodside CEO Peter Coleman spoke of Woodside's pride in achieving RFSU and becoming the third operational, large-scale LNG production plant in Australia, following Woodside's own longstanding Karratha Gas Plant (North West Shelf JV) and ConocoPhillips' (NYSE:COP) (Houston, Texas) Darwin LNG project. Woodside is working toward the path to steady-state production.

A number of LNG projects are currently progressing in the post-final investment decision development and construction phases, including Gorgon (Western Australia), Queensland Curtis LNG (Queensland), Gladstone LNG (Queensland), Wheatstone LNG (Western Australia), Australia Pacific LNG (Queensland) and Prelude FLNG (offshore Western Australia). An expansion of the Pluto project was at one point on the cards to be operational, with many of the afore-mentioned projects.

An additional one or two 4.3 million-metric-tonne-per-year processing trains have been relegated to fall behind Woodside's Browse LNG project, due to the lack of success in reaching the target for natural gas reserves. Woodside has made a fortunate discovery 200 kilometres southwest of the Pluto fields in the Ragner Hub. While Woodside still will need to investigate the economic viability of using the reserves to supply the Pluto LNG expansion, the discovery is a positive step toward further development at the newly operational site.

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