UPDATE: Woodside Comfortable With 50% Equity In Browse
August 24 2009 - 11:19PM
Dow Jones News
Woodside Petroleum Ltd. (WPL.AU) Chief Executive Don Voelte said
Tuesday that Woodside is "comfortable" in maintaining its 50% stake
in the Browse liquefied natural gas venture.
He said Woodside won't have to "barter away" any equity to
progress the LNG development, which could be in production in the
period 2015 to 2017.
The chief executive also played down joint venture disputes at
Browse over where to process gas from the field, located offshore
Western Australia.
He said that differences of opinion weren't uncommon in a joint
venture involving five large oil and gas companies.
Alongside operator Woodside, the Browse partners are BHP
Billiton (BHP), BP PLC (BP), Chevron Corp. (CVX), and Royal Dutch
Shell PLC (RDSB.LN).
Woodside and the state government of Western Australia want the
Browse LNG processing plant built at a proposed LNG hub at James
Price Point in the Kimberley region.
Other Browse partners are yet to select their preferred
location, and want to explore the possibility of piping gas to
existing North West Shelf infrastructure in the Pilbara region.
Voelte dismissed media speculation that Browse, estimated to
contain 14 trillion cubic feet of dry gas and 370 million barrels
of condensate, may cost up to A$50 billion to develop in the
Kimberley.
He declined to make an estimate, but said the cost of the
Kimberley option would be only a "small fraction" higher than the
Pilbara alternative.
And piping the gas to the North West Shelf would delay initial
production from Browse until 2022-23, with "full load" production
unlikely before 2028.
"That's a long time to wait for the citizens of Australia to
make money off that project," he said.
In contrast, the Kimberley plan could see first production in
the 2015-2017 timeframe, he said.
A final investment decision on Browse may be made 12 or 18
months after a decision is made by Chevron Corp. (CVX) on its
Gorgon project, Voelte said.
Chevron has said it plans to make the decision by the end of the
year.
Turning to Woodside's 90%-owned Pluto venture, due to ship its
first LNG in early 2011, Voelte said that Woodside wants to expand
Pluto by "four or five times the size of the initial project".
Woodside is "progressing" work on a Pluto expansion and is in
talks with a "couple of companies" on sourcing third-party gas.
But Woodside is confident of locating more of its own gas, and
has 39 exploration wells planned for the region.
"We've actually scheduled 24 of those wells over the next six
quarters, so we think that the base plan is we'll find plenty of
gas on our own," he said.
Last week, Woodside said that front-end engineering and design,
or FEED, work on a second and third train at Pluto has already
commenced.
A final investment decision on a second train could occur in
late 2010, and on a third train by late 2011, the company said.
-By Stephen Bell, contributing to Dow Jones Newswires;
61-8-9244-4243; sgbell@bigpond.com