Woodside Energy's Scarborough, Pluto Train 2 on track amid LNG output rise

Woodside Energy's Scarborough and Pluto Train 2 LNG projects in Western Australia are 25% complete and on track to deliver a first LNG cargo in 2026, bringing essential volumes to a market exhibiting robust demand, the Australia-based global energy company said Jan. 25.

Within Australia, the company's existing LNG production at the North West Shelf, Pluto, and Wheatstone projects totaled 24.284 million barrels of oil equivalent in the fourth quarter, compared with 17.434 million boe in the same period of 2021, Woodside Energy said in an ASX announcement.

Woodside said it had also inked binding agreements with Maran Gas Maritime for the long-term charter of two newbuild LNG carriers to be delivered to support the delivery of Scarborough LNG cargoes and growth in trading activities.

The company's targeted LNG production increases come at a time when prices remain elevated amid limited global supplies, with Australia remaining among the largest global LNG exporters.

The Platts Asia JKM Japan/Korea DES spot price hit a historic high $84.762/MMBtu on March 7, following Russia's invasion of Ukraine. For 2022 as a whole, the Platts JKM averaged about $33.9789/MMBtu compared with $18.59543/MMBtu in 2021. Platts is part of S&P Global Commodity Insights.

Australian consultancy EnergyQuest in its December report estimated that Australia exported a record 81.4 million mt of LNG in 2022, up 0.5% from 81.1 million mt in 2021.

Advancing projects to meet demand

"Most of the major equipment for the Scarborough floating production unit has been ordered and module construction of Pluto Train 2 has commenced," the Woodside Energy said.

The Pluto Train 2 site was handed over to Bechtel, and the LNG train module and construction commenced in Indonesia, Woodside said, adding that pipeline manufacturing was 59% complete and 92% of tagged equipment had been ordered for the FPO.

The company, which also marked an important milestone during Q4 2022 by passing 50 million mt of LNG production at Pluto since the facility started up in 2012, said its "ongoing production of Pluto gas through the Pluto-KGP Interconnector continues to deliver additional LNG volumes to a market with strong demand."

Meanwhile, Woodside and NWS project participants signed non-binding agreements with Western Gas for processing 2-3 million mt/year of gas from its Equus project from 2027, initially through the Karratha Gas Plant and then later through Pluto LNG.

"Discussions continue with other resource owners for processing of additional third-party gas," it said.

Although the company's average realized price in Q4 was $98/boe, down from $102/boe in Q3 2022, due to lower international crude oil and LNG prices, and trading activity, it recorded strong production results, it said.

Woodside CEO Meg O'Neill said total production in Q4 was a record 51.6 million boe.

"Woodside's production guidance for full-year 2023 remains 180 million to 190 million barrels of oil equivalent," she said.

Woodside also has a hedging program in the form of Henry Hub and Title Transfer Facility commodity swaps for Corpus Christi LNG volumes to protect against downside pricing risk, it said.

"As at December 31, 2022, approximately 49% of Corpus Christi volumes included in stock in transit for 2022, approximately 82% of 2023 volumes and approximately 29% of 2024 volumes have reduced pricing risk as a result of hedging activities," it said.

In addition, "Woodside contributed 29.4 PJ to the east coast Australian gas market in the quarter," it said.

New energy projects

Woodside Energy also said it is harnessing new energy projects as it advances its sustainability goals.

"In our new energy portfolio, front-end engineering design (FEED) has now been completed at H2OK and contracts were awarded for key equipment, putting us on target to be ready for FID in 2023," it said.

The H20K project site in Ardmore, in the US, aims to produce liquid hydrogen for hydrogen fuel cell-powered commercial and heavy transport vehicles.

In addition to H2OK, Woodside is working on proposed hydrogen projects in Australia, H2Perth and H2TAS.

Woodside was selected as the preferred partner to progress to the next stage of the proposed Southern Green Hydrogen project in New Zealand.

The proposed project will target production of 500,000 mt/year of ammonia using electrolysis from renewable power, it said, noting that next steps will involve project participants working towards commencing FEED for the project.

Woodside was also planning a solar project in Australia, with the company entering an Indigenous land use and modern benefits sharing agreement for the Woodside Solar project and "targeting FID readiness in 2023."