Weather causes delays to NW Australia programs

Offshore staff

PERTH, Australia – Woodside has revised its cost/schedule estimate for the Pluto LNG project in northwest Australia. The first LNG cargo is now expected next March, due to slower progress on commissioning of the onshore gas plant, and seven weeks of weather delays.

This will likely push the project cost up by $955 million to $15.8 billion, including arrangements with customers affected by the delay.

Woodside CEO Peter Coleman said: “While we would like to start up the project as quickly as possible, we will not be doing so until we are satisfied the commissioning work has been completed in a thorough and safe manner.

“It is important to take a long-term view. Pluto is an attractive project underpinned by 15-year sales contracts which will provide significant value to Woodside shareholders.”

Bad weather has also hit the North West Shelf Oil Redevelopment Project, with heavy seas hindering completion of subsea work. Progress was further impacted by a mechanical fault on a contractor’s installation support vessel.

The project, which includes installation of the converted FPSO Okha, is now expected to start up in October. The overall cost estimate remains in the region of $1.9 billion.

However, the delays to both projects will impact Woodside’s 2011 production, with the company now targeting 62-64 MMboe.

Woodside holds 90% equity in the Pluto LNG Project and 33% in the NWS Oil Redevelopment Project.

06/17/2011



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