Woodside, Uniper in Scarborough gas deal

Australian oil and gas company Woodside Energy gas signed a heads of agreement with Uniper for the sale of LNG from, among others, Scarborough offshore gas field in W. Australia.

Scarborough upstream concept schematic / Image source: Woodside
Scarborough upstream concept schematic / Image source: Woodside

According to the agreement, the LNG from Woodside’s wider portfolio would be supplied for a period of 13 years, starting in 2021.

The quantity of LNG to be supplied will initially be up to 0.5 million tonnes per annum (Mtpa), increasing to approximately 1 Mtpa from 2025, Woodside said.

Woodside CEO Peter Coleman said the HOA, signed at Gastech in Houston, builds on previous LNG supply arrangements between Woodside and Uniper.

“This HOA deepens our relationship with Uniper, an international energy company and a leading player in global gas markets.”

“It is also another strong signal of market support for our plans to expand the Pluto LNG facility in Western Australia. The addition of a second LNG production train at Pluto, to be supplied with gas from the Scarborough offshore field development, is a key element of our proposed Burrup Hub,” Coleman said.

“Uniper is committed to growing its LNG Trading business in both the Atlantic and Pacific basins. This HOA with Woodside, one of Asia-Pacific’s leading LNG producers, is a further demonstration of the expansion of our portfolio in the region,” said Uniper CEO Keith Martin.

Woodside said the HOA remained conditional upon the negotiation and execution of a fully termed LNG sale and purchase agreement, obtaining all necessary approvals and, with respect to supply from 2025, a final investment decision on the Scarborough development.

The Australian firm has previously also signed heads of agreement (HOA) with ENN Group for the sale of 1.0 million tonnes of LNG per annum from Woodside’s portfolio for a period of 10 years, starting in 2025, sourced from the Scarborough offshore gas field in Australia.

Also, Woodside in November 2018 entered into a long-term gas sale and purchase agreement with W. Australia-based Perdaman for the supply of pipeline gas from Scarborough for a term of 20 years.

Scarborough field

Woodside took over operatorship over the Scarborough project off W. Australia from ExxonMobil in 2018. Woodside paid $444 million for Exxon’s share and will pay $300 million following a positive final investment decision to develop the Scarborough field. The FID, according to the previously disclosed information, is expected to be made in 2020.

The Scarborough area contains the Scarborough, Thebe and Jupiter gas fields, which are estimated to contain gross (100%) contingent resources (2C) of 9.2 Tcf of dry gas.

The Scarborough gas field, discovered in 1979, is located off the coast of Western Australia approximately 220 kilometers northwest of Exmouth in 900 meters of water. It is one of the most remote of the Carnarvon Basin gas resources. Woodside first bought a stake there in 2016 from BHP Billiton.

Woodside in January awarded four contracts for front-end engineering design activities for the project to McDermott, Subsea Integration Alliance, Saipem, and Intecsea. Come February and McDermott signed a contract with Woodside to undertake a front-end engineering and design activities for a floating production unit (FPU) for the Scarborough field gas development.

Woodside’s preferred concept for the development of the 7.3 Tcf (2C 100%) Scarborough gas resource (Woodside 75%) is through new offshore facilities connected by an approximately 430 km export pipeline to the Burrup Peninsula with onshore processing at the expanded Pluto LNG facility.

 

Shift from FLNG to Onshore

 

Six years ago in 2013, Exxon and BHP Billiton (now BHP), then the sole partners in the Scarborough area, had received the environmental approval for the Scarborough field development via what was to be the world’s largest FLNG facility. The FID had been slated for 2014-2015, but the collapse in oil prices then forced the partners to pull the breaks on the project.

The FLNG options are now off the table, as Woodside has shifted focus towards its existing onshore infrastructure – Burrup Hub – for the development of the Scarborough area.

Woodside is proposing to develop the Scarborough resource with 12 subsea, high-rate gas wells tied back to a semi-submersible platform moored in 900 m of water.

The ~20,000 t topsides will have processing facilities for gas dehydration and compression to transport the gas through a ~400 km pipeline to the Woodside-operated Pluto LNG facility. The cost of the development is estimated at $8.5 – $9.7 billion.

The first production from the development is expected in 2025, to meet what Woodside expects to be a global LNG supply gap.

Offshore Energy Today Staff


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