Woodside Turns Focus Back to LNG Facility in Pluto Gas Field

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Researched by Industrial Info Resources Australia (Perth, Australia)--Woodside Petroleum's (ASX:WPL) (Perth, Australia) Pluto LNG facility is back in the news as the company announced its plans to resume the hunt for more gas in the Pluto Gas Field. Woodside hopes to maintain production growth and meet contracted future sales agreements.

Woodside Chief Executive Peter Coleman has announced that the company plans to have two drilling rigs operating in and around the Pluto Gas Field by early next year. Current estimates are that the Pluto and nearby Xena gas fields contain 5 trillion cubic feet of dry gas and an additional 250 billion cubic feet of contingent resources. Woodside is hoping to increase this estimate by focusing on about eight prospective drilling sites.

This move comes despite Woodside's April announcement that it would not consider an expansion of the Pluto LNG facility at any point in the near term. Industry commentators believe that the recently abandoned plans for an onshore processing facility at James Price Point for the Browse project, alongside a lack of successful exploration drilling programs elsewhere, have forced Woodside to turn its attention back to the Pluto Gas Field in order to fill a potential hole in its production growth.

Others have suggested that Woodside will struggle to meet its targets unless it seeks to acquire rival companies or oil and gas fields that are already in development.

Coleman has said that he disagrees with those predictions, saying that although Woodside has the ability to make a sizeable acquisition, it is only interested in acquiring willing sellers, and therefore is not keen on making hostile takeover bids.

Instead, Woodside wants to expand the Pluto facility, since current market conditions and ever-increasing construction costs are making it more viable to expand an existing facility than to start a new development from scratch.

Pluto LNG currently comprises an offshore platform connected to five subsea wells on the Pluto Gas Field. Gas is piped in a 180-kilometer trunkline to the onshore facility, located between the North West Shelf Project and Dampier Port on the Burrup Peninsula, in Western Australia. Onshore infrastructure comprises a single LNG processing train with a production capacity of about 4.3 million tonnes a year. Storage and loading facilities at the plant include two LNG tanks, three smaller condensate tanks, and an LNG and condensate export jetty.

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