Published: Jun 27, 2007
SYDNEY (Thomson Financial) – Woodside Petroleum Ltd, the operator of the North-West Shelf gas venture in north Western Australia, has indicated the cost of constructing a fifth liquefied natural gas (LNG) processing train for the project may go beyond a revised estimate of 2.425 bln aud.
The group’s chief executive, Don Voelte, told a UBS conference in Sydney, Wednesday, that the cost of building the processing plant has risen.
However he said the expansion project is still on track for its first LNG shipments in the fourth quarter of 2008.
Last October, Woodside, 34 pct owned by the Royal Dutch Shell group, said the project’s cost estimate had increased to 2.425 bln aud from the original projection of 2.00 bln aud when it was approved in June 2005.
Woodside has a one sixth stake in the North West Shelf project and Shell has the same, while other investors include BHP Billiton, Chevron Corp, BP Plc and Japan Australia LNG (MiMi) Pty Ltd – a joint venture of Mitsubishi Corp and Mitsui & Co.
Voelte told the UBS conference a mining boom in Western Australia and a competing number of potential LNG developments is driving cost increases and a shortage of rigs, materials and resources, making it challenging to develop new projects.
Nevertheless, he said, Woodside expects to make a final investment decision on its wholly-owned Pluto LNG project off the north-western Australian coast shortly
“If the final investment decision is taken in the next couple of months, we expect to have first production by late 2010,” Voelte said.
Voelte added the Pluto project will be built as a gas aggregation hub that could expand to facilitate development of new gas discoveries in the offshore area made by Woodside or others.
(1 usd = 1.18 aud)
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