Flagship Australian LNG facility to start shutting in trains in 2024 - Upstream Online

Flagship Australian LNG facility to start shutting in trains in 2024 | Upstream Online

The Woodside Energy-operated North West Shelf (NWS) 16.9 million tonnes per annum liquefied natural gas project in Western Australia intends next year to shut down one of its five liquefaction trains.

The move comes even though Woodside is still eyeing its own unexploited gas discoveries, such as the 15 trillion cubic feet-plus Browse asset, and third party fields to provide future feedstock.

“Even in a world where we bring Browse gas in, we don’t anticipate needing five trains to process the Browse resource. So, we will be stepping trains down over time. The profile of that will depend a bit on reservoir performance, but the first train [will be] next year,” said Woodside chief executive Meg O’Neill.

She confirmed that the first train will definitely be shut-in although future trains might be mothballed instead, meaning they could be reactivated to cope with future potential liquefaction demand.

“The first train is a closure scenario. I’ve got experience operating late-life LNG plants and the first train shutdown becomes the parts train and I expect that will happen here as well, particularly with some of the older equipment that we have,” she said during Woodside’s investor briefing day.

“Decisions subsequent to that will have to be made on the day. The cost difference between shutting down and mothballing isn’t tremendous, so we’ll leave it to the North West Shelf joint venture to sort that out. … if it wants to market capacity for gas processing, maintain that capacity for gas processing… a starting point would be North West Shelf making sure that it’s got capacity available to market to others.”

Browse proving challenging

However, against this backdrop, Woodside is still struggling to get its Browse giant field development — intended to exploit Australia’s largest unexploited conventional gas resource - off the drawing board.

“We need three things for Browse — we need a carbon solution; we need kind of clarity on our ability to obtain environmental approvals; and we need commercial agreement to process Browse gas through the North West Shelf,” O’Neill reiterated.

“We've made really good progress on a carbon solution”, she said, adding that Woodside is continuing to work with the Commonwealth and State governments to secure the necessary environmental approvals for Browse.

“Those applications have been with the regulators for several years now and we continue to try to move them forward, but it is a bit of a challenging environment,” she admitted.

“And thirdly, we are in active discussions between the Browse joint venture and North West Shelf joint venture on a potential tolling agreement. So, we continue to work on the things that are critical path,” said O’Neill.

Not ramping up engineering

“From the perspective of being sensible with our deployment of shareholder funds, we are being very measured in our approach to Browse to make sure we don't ramp up engineering ahead of resolving these critical matters.”

She added that Woodside hears “very regularly” from the Japanese government, LNG customers in Japan and the company’s joint venture partners that they’re keen for the Browse development to progress.

“So, the appetite is there… and the demand for LNG from Browse is there, so we will continue to work with the Commonwealth regulator and the [Western Australian] state to try to progress Browse.”

This field development envisages two floating production, storage and offloading facilities and an approximate 900-kilometre subsea pipeline to the existing NWS infrastructure at Karratha, Western Australia. Browse is expected to produce 11.4 million tpa of LNG plus liquid petroleum gas and domestic gas.

A carbon capture and storage solution to abate Browse reservoir carbon dioxide (CO2) has been determined to be feasible by the partners and this CCS infrastructure has subsequently been incorporated into the development concept.

The Browse co-venturers’ participating interests are Woodside with 30.6%, BP on 44.33%, Japan Australia LNG (MiMi) having 14.4% and PetroChina with 10.67%.

Gift that keeps on giving

The NWS asset has produced domestic gas for almost 40 years and LNG for close to 35 years.

“It is a gift that has continued to give over the years. We’ve developed not just the big anchor fields, so Rankin and Goodwyn, but a number of satellite fields around the basin. We’re at a point - the reservoirs have different drive mechanisms and there’s always a bit of uncertainty. We model all of the reservoirs individually to make sure we understand the range of possible outcomes,” explained O’Neill.

“… until the last couple of years we were plant constrained and so our focus was very much on LNG plant reliability. I’m really proud of how the team has pivoted to understand, when you’re not LNG plant constrained, how to operate the business,” she said.

“We’ve got projects under way to reduce back pressure, so that’s one of the key levers. If you’re trying to get more gas out of the ground and it’s as simple as releasing gas from a balloon, it’s the same mechanism. If you’ve got less pressure to fight against, you can get more gas out, so we’ve got projects under way to try to reduce the back pressure, try to squeeze a bit more gas out of the fields.

“All of those efforts are under way. Lambert West [is] an infill opportunity, so that’s assets that’s been on our radar for a long time and we continue to develop the subsurface understanding of that field,” said O’Neill.

She confirmed that that Woodside is continuing to talk to other gas resource holders in the basin about potentially processing through the Karratha Gas Plant, “so we are looking for other gas that we can flow through the facility”.

The KGP initially housed two 2.2 million tpa liquefaction trains, that were subsequently modified to boost their respective capacity to 2.5 million tpa. Train 3 was reportedly a similar capacity, while trains 4 and 5 had initial nameplate capacity of 4.4 million tpa apiece.

The NWS partners are Woodside, Chevron, Shell, BP and MiMi.