Woodside announces $2 billion invnestment in North West Shelf gas

Western Australia will see a massive increase in offshore gas activity in 2020, with Woodside Petroleum greenlighting phase two of the Greater Western Flank Project (GWF-2).

With approval from equal project participants BHP, BP, Chevron, Shell and Japan Australia LNG, and Woodside Energy as the operator, GWF-2 will bring more than $2.75 billion worth of investment to the industry.

Subsea infrastructure will be built between the Keast, Dockrell, Sculptor, Rankin, Lady Nora and Pemberton gas fields, as well as a 16” pipeline to the Goodwyn A platform, which will facilitate the development of 1.6 trillion cubic feet of gas.

Federal resources minister Josh Frydenberg welcomed the announcement, and said GWF-2 puts Australia on track to become the world’s largest LNG exporter by 2020.

“At a challenging time, this announcement is another sign of the strength and resilience of Australia’s resources and energy sectors which have seen 15 projects worth around $13 billion approved for investment since November 2014,” he said.

“Since it commenced production in 1984, the North West Shelf Project has provided more than 40 per cent of Australia’s total oil and gas production and has delivered more than 4,000 shipments of liquefied natural gas (LNG) to the Asia-Pacific region since its first cargo in 1989.”

The initial project start-up is expected in the second half of 2019 with gas delivery from five wells, to be followed by another three wells in early 2020.

Woodside CEO Peter Coleman said the GWS-2 development was part of a strategy to deliver gas reserves “in a timely and efficient manner” through a series of sub-sea tiebacks to extend plateau production.

GWS-2 will the fourth major gas development for the North-West Shelf Project in the past seven years.

In the domestic market, gas consumption on the east coast is expected to more than double in the next five years, with further increases forecast as coal-fired power stations are retired.

Australian Petroleum Production and Exploration Association chief Malcolm Roberts said the government needs to implement new policies to encourage the development of gas supplies to meet growing demand at affordable prices.

“Gas prices have increased in recent years for a number of reasons and this is having an impact on domestic demand,” Roberts said.

“While the fall in the oil price will provide some relief to consumers in the short-term, it is vital that governments support policies that put downward pressure on gas prices by increasing supply.

“We are seeing a market in transition, not one that deserves to needlessly suffer through policies that restrict gas development.”

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