Woodside Raises Cost Estimate

Woodside has raised the cost estimate for its Scarborough-to-Pluto LNG project to US$12 billion. That's up about 5% from an original cost estimate of US$11.4 billion announced in November 2019. The project consists of developing the Scarborough offshore gas field to supply gas to a second liquefaction train, which will be built at the Pluto LNG plant in northwest Australia. Costs increased by about 3% to US$6.3 billion for the onshore component and by about 8% to US$5.7 billion for the offshore component. The revised cost estimate reflects a 20% increase in offshore processing capacity and modification of the original Pluto Train 1 liquefaction facility to allow for the processing of additional gas from the Scarborough offshore field. The recent surge in commodity prices has also raised the cost of construction materials. Woodside says the Scarborough field can still supply gas to Northern Asia at a globally competitive cost of around US$6.80/MMBtu, despite the higher price tag for the project. Development of the 8.3 trillion cubic foot Scarborough gas field and construction of Pluto Train 2 is expected to be sanctioned by the end of the year once a permanent CEO is appointed at Woodside (IOD Feb.18'21).