WOODSIDE says it will add a carbon capture project to its Browse gas project off the coast of Western Australia in response to environmental concerns.
Company CEO Peter Coleman told investors that sequestering carbon at Browse will be required but warned it would not affect the economics of the US$20bn project in a material way. The announcement came as the company shelved investment decisions on Browse and two other projects in response to the coronavirus pandemic and low oil price.
“I think you may see a revised development plan and that's more likely to include the sequestration from day one in the [Browse] project rather than the current plan, which is about after year ten,” Coleman said.
The coronavirus pandemic and the decision by Saudi Arabia to flood the market with crude oil has seen the price more than halve from above US$60/bbl in January.
Woodside said it would delay its targeted final investment decision on the Scarborough offshore gas production project and a second LNG train for the Pluto plant until 2021. These projects, along with Browse, which consists of three offshore gas fields 425 km North of Broome, form part of the Burrup Hub on the coast of Western Australia. New floating production systems at Scarborough and Browse will supply gas onshore though pipelines, some via existing infrastructure to the Pluto LNG plant and the Karratha processing plant which produces LNG, domestic gas, condensate and LPG.
While LNG is promoted as a cleaner form of fossil fuel, its expanded production in Australia has increased the country’s annual emissions. Furthermore, CCS efforts in Western Australia have not been without their complications, after Chevron’s Gorgon LNG project struggled for more than two years to successfully start up its carbon capture facilities.
Wood Mackenzie says it expects Browse will now be sanctioned in 2023 with first gas produced in 2028 or 2029, The Australian reports.
In response to the coronavirus, Woodside is halving operating spend, exploration spend, and capital spend expenditure in 2020. It said the full impact of the lower oil price will not be known until Q2 due to the lag between crude and LNG prices. Coleman noted that it has frozen hiring except for graduates, which will continue.
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