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    Woodside Strikes Toll Deal for Scarborough Gas

Summary

Woodside says Scarborough is on track for an FID in the first half of 2020.

by: Joseph Murphy

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Woodside Strikes Toll Deal for Scarborough Gas

Woodside announced on November 18 it had agreed a tolling price with BHP for the processing of gas from their Scarborough field off northwest Australia at the Pluto LNG facility.

The Perth-based producer said in a statement that the agreed price would be valid until March 31 2020. It did not disclose the price, but said it was based on BHP maintaining no more than a 25% interest in the WA-1-R block containing Scarborough until a final investment decision (FID) on the project is taken.

Through the agreement, Woodside has taken another step forward in establishing an LNG hub based on gas at Scarborough and other fields in the area, CEO Peter Coleman said in a statement.

“This agreement on tolling price, together with the increase in Scarborough gas resources announced earlier this month, provides a compelling and aligned basis for BHP and Woodside to finalise the required conditional binding agreements by the end of the first quarter of 2020,” he explained.

Scarborough’s gas is to be processed at a deepwater floating production unit and then pumped via a 430-km pipeline to a proposed second LNG production train at Woodside’s Pluto LNG plant on Western Australia’s Burrup Peninsula. Woodside is targeting first gas from the field in 2024.

“The joint venture is now in a strong position to proceed to FID in the first half of next year,” Coleman said.