Woodside holds talks on Pluto LNG pipeline expansion
Summary: Woodside Petroleum is in talks with oil majors Chevron and Shell about building a larger pipeline from its Scarborough gasfield off Western Australia to bring gas to the Woodside-operated Pluto LNG plant on the Burrup Peninsula.....
But Woodside chief Peter Coleman said it was unlikely Chevron and Shell would be ready in time to join the Scarborough pipeline, revealing Woodside was also considering building a larger Pluto expansion than flagged to process third-party gas in the longer term.
Chevron Australia managing director Nigel Hearne revealed the bigger pipeline concept yesterday at the Australian Petroleum and Production Association conference in Adelaide, where he called for a multi-user pipeline running from Scarborough to the Burrup Peninsula, linking along the way into the big fields in between in which Chevron has interests.
In February, Woodside revealed it planned to develop Scarborough, which it bought a 75 per cent stake in from ExxonMobil and BHP last year, by building a second LNG train at Pluto.
Yesterday, Mr Coleman said the Chevron plan was essentially the same as Woodside was considering to bring Scarborough gas to the Pluto plant, on the Burrup, but with a bigger diameter, adding Woodside had been in talks with Chevron for some time about the plan. “As we finalise our plans (for Scarborough) we’ll be going to Chevron and Shell and others (and asking) do they wish to contribute to the size of the pipeline,” the Woodside chief said on the sidelines of the conference.
“My expectation is they probably won’t be quite ready yet, but at least we’ll have a structure in place.”
He said Woodside would be open to selling the pipeline to an infrastructure company once it was built.
Mr Coleman said if a bigger pipeline was not built, one option was to build a larger plant at Pluto to process Scarborough’s reserves faster and open up spare capacity at a later date for other fields.
Mr Hearne said a collaborative, shared infrastructure model had been successful in other major petroleum provinces, such as the North Sea. “The NWS (North West Shelf) has got capacity opening up and Pluto has sufficient infrastructure to add an existing train at relatively low cost,” Mr Hearne said.
“We want to make sure that if Pluto does add a train, that it’s optimised for them (Woodside) and gives them the most economic return. If we can be part of putting gas into either the NWS or Pluto, that’s a good outcome for everybody.”
Separately, Mr Coleman revealed Woodside was looking at making hydrogen from WA natural gas and exporting it to Japan in the longer term.
He said the opportunity was “huge”.
“By the 2030s I expect we will see at-scale hydrogen production around the world — and we’re looking to be part of that,” Mr Coleman said.
He said Woodside was looking to take advantage of the Pilbara’s abundant sunshine to use clean power to separate hydrogen from natural gas, or methane. The carbon left over would either be captured and stored or used to manufacture other products.
Mr Coleman revealed the North West Shelf plant was looking to convert its power plant, which is responsible for 70 per cent of the emissions in LNG production, to cleaner energy at a cost of hundreds of millions of dollars, once a deal was struck to process backfill gas there.
Woodside would then look at the prospect of using cleaner power to make hydrogen.