Burrup Park (Pluto) LNG Project, Australia

The Burrup Park LNG project is being developed on the Burrup Peninsular near Karratha to support the new offshore Pluto gas fields (discovered in 2005) as well as other regional fields such as its satellite field Xena.

The owner and developer of the new facility is Woodside Burrup Pty Ltd which is a subsidiary of Woodside Energy Ltd (one-third owned by Shell). The project, which started construction in the fourth quarter of 2007, is scheduled to be delivering gas for export by the end of 2010.

The investment for the LNG project is expected to be in excess of A$1.4bn; however the total budget for the development of the Pluto gas field is A$10.5bn (including platforms, pipelines and the gas liquefaction plant).

Woodside Energy will pay for its share of the project using free cash flow from operations, debt issues and a dividend reinvestment plan.

BURRUP PARK DESIGN AND CONSTRUCTION

FEED (Front-End Engineering and Design) for the facility started in September 2006 (A$192m project) and was undertaken by FWWP (a joint venture of Foster Wheeler (60%) and Worley Parsons (40%)). FWWP have also been awarded the Engineering, Procurement and Construction (EPC) contract for the project.

In November 2007 Leighton Contractors was awarded a A$163m contract for the site preparation and bulk earthworks at the Burrup Park site. This work will involve drilling and blasting as well as loading and hauling spoil and also compaction, crushing and screening and will be completed by the third quarter of 2008.

The facility will initially have a single LNG train with the capacity to send out 4.3 million tonnes annually. In addition there will be a fractionation unit, an acid gas recovery unit, gas purification units, gas storage facilities, a boil-off gas compressor, shipping channel, loading berths, turning basin, gas turbine power generation units and all other necessary infrastructure such as offices, roads, dormitories and a canteen.

Woodside would like to eventually add more LNG trains to the site, and also possibly a domestic gas hub.

GAS CLIENTS

Woodside Energy own 90% of the project and the other 10% is split between two gas companies who will take delivery of the gas output from the plant for at least 15 years (with option to extend for a further five years).

The majority of the LNG will go to two Japanese utilities companies, Tokyo Gas and Kansai Electric who will each receive up to 3.75 million tonnes annually (Tokyo Gas 1.75 million tonnes and Kansai Electric two million tonnes), which is about 85% of the first train production. Each of these companies intend to operate one LNG tanker and Woodside Energy will lease another to transport smaller quantities of gas to other customers.

The gas that doesn't go to Japan may be transported to the west coast of the US where Woodside might construct another LNG terminal (part of this potential project might involve special carriers with their own regasification equipment).

GAS FIELDS

Pluto and its smaller satellite field Xena, are off the north-west coast of Australia, in 1,000ft of water about 163km (120 miles) north-west of Karratha.

The Pluto field will initially be developed with five big-bore subsea wells tied back to a production platform in about 275ft of water. A single 36in pipeline will then connect that platform to the new LNG plant on the Burrup Peninsula.

Development of these gas fields (FEED contract) is being undertaken by a joint venture (EOS) of Worley Parsons (50%) and KBR (50%). The Pluto and Xena fields are expected to yield five trillion cubic feet of gas and provide about 20 years of production to the new LNG plant.

It is possible that other gas sources could be tied into production at the plant from the Browse Basin or from the Gorgon Complex (40 trillion cubic feet reserves).

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