Woodside CEO lacks faith in “mega-projects”

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The future of the Browse Basin LNG project is uncertain, with Woodside petroleum reporting a 99 per cent fall in full year profit.

In an interview with Westbusiness, Woodside chief executive Peter Coleman indicated his growing doubts about “mega projects” such as the Pluto LNG development, the notoriously delayed Gorgon project, and the Wheatstone project which now also faces delays.

“As an industry (we have to ask) is the mega project dead,” Coleman said.

“By mega project I mean the big, big things, where you do everything at once, or are we going to go back and match risk where finance is much better, where we see more phased projects.

“The projects became too complex to manage effectively, both from an owner point of view and from an execution point of view for the contractors, and over time the contractors laid off risk, it came more into the owner’s house, and the owners didn’t necessarily have the insights that they needed to properly manage and execute.

“So we could be seeing the death of the mega project and get back to smaller projects, phasing, de-risking and learning as we go.”

The Browse Basin LNG development will be serviced by the Shell Prelude FLNG facility, a floating liquefaction plant which will preclude the need for piping gas back to the mainland before export shipping.

The Prelude vessel is currently under construction in Korea, and is expected this year, when it will be positioned in the Prelude gas fields, 200km from the West Australian coastline.

Woodside states the Browse development is still in the front-end engineering and design (FEED) phase, and has not yet reached the stage of a final investment decision.