Woodside pushes back major LNG projects

Woodside is postponing final investment decisions for its three LNG growth projects worth more than $50 billion in a response to the oil price crash and the Covid-19 pandemic.

The projects in question include Scarborough, Pluto Train 2 and Browse LNG.

The Australian company announced a number of measures on Friday including a 50 percent reduction in spending for 2020.

The current uncertain global investment environment arising from the spread of Covid-19, combined with oversupply of crude oil and LNG, has led to significant decline in prices.

This requires a “decisive and swift action,” Woodside said.

The company will reduce spending to about $2.4 billion and about $100 million in operational spending.

As part of the measuers, Woodisde aims to reduce investments for about 60 percent to $1.7 – 1.9 billion.

Besides delaying final decisions on its large LNG growth projects to 2021, Woodside will also postpone other activities.

These include most proposed exploration activities, reducing overall exploration expenditure by about 50 percent to $75 million.

Woodside said it would continue finalizing commercial deals and regulatory approvals for Scarborough, Pluto Train 2 and Browse.

The company also noted that there would be some ongoing engineering work in preparation for a FID on these projects.

The Covid-19 pandemic has affected the entire industry.

Woodside CEO Peter Coleman said all steps were being taken to “protect the wellbeing of those who work for and with the company”.

“These are extraordinary times, that no one could have foreseen,” he said.

But Woodside enters this period of uncertainty with one of the “stronger balance sheets” in the industry and low-cost producing assets, which are resilient to commodity price fluctuations, Coleman said.

Most Popular

Venture Global’s CP2 LNG to start mobilization and site preparation

Venture Global LNG's CP2 LNG has received approval from the US FERC to start mobilization and other limited activities for the LNG project in Louisiana.

Prime Infra to buy 60 percent stake in First Gen’s Batangas LNG terminal

First Gen has entered into a deal with Prime Infrastructure Capital under which the latter will acquire a 60 percent equity stake in First Gen's gas business in the Philippines, including the Batanagas LNG terminal.

Atlantic LNG shipping rates continue to decrease

Atlantic LNG freight shipping rates continued to decrease this week, while European prices also dropped compared to last week.

More News Like This

Woodside gets OK for NWS extension project

Australian LNG player Woodside and its partners in the North West Shelf joint venture have secured environmental approval from the Australian government for the North West Shelf project extension.

Woodside to raise $3.5 billion via US bonds

Australian LNG player Woodside has priced $3.5 billion of senior unsecured bonds in the US market.

Woodside’s Louisiana LNG seeks FERC extension

Woodside is seeking an additional eight-month extension from the US FERC to complete and put into service its Louisiana LNG export facility.

Aramco plans to join Woodside’s Louisiana LNG project

Saudi Arabia’s energy behemoth Aramco plans to take a stake in Woodside's Louisiana LNG export project.