Pipe Dream? Chevron, Woodside Vie to Shape Australia's LNG Sector
MELBOURNE, June 15 (Reuters) - After spending a decade and billions of dollars developing Australia's vast gas reserves, U.S. energy giant Chevron Corp and local firm Woodside Petroleum are at odds over the pace and timing of the next leg of expansion.
Shipments of liquefied natural gas (LNG) have become one of Australia's biggest exports and a key source of revenue for many energy majors, so any hurdles in the sector's development could strike a substantial blow.
The issue comes down to how quickly to build a shared infrastructure system that would include a major trunk pipeline for transporting gas from mammoth new offshore fields owned by various companies in northwest Australia.
Woodside wants to take the lead in such a project, pushing to build soon so it can go ahead with its $11 billion Scarborough development, the only new gas field in the region that is primed for a final investment decision by 2020.
But Chevron would prefer to spend more time planning and building such a system, which it says could be led by it or other companies.
"I don't think there are any showstoppers in changing ... to a more shared infrastructure model," Chevron's Asia Pacific exploration and production president, Stephen Green, said in a group interview.
"It's just getting the alignment of all the different parties that want to participate in that value chain and coming up with the structure that satisfies each party's needs."
Firms with stakes in the region's gas fields, including Royal Dutch Shell, BP and BHP Billiton , will need to decide which option to pursue within the next 18 months to ensure untapped reserves are available ahead of a supply shortfall that some industry analysts see emerging from around 2022.
Putting pressure on his peers, Woodside Chief Executive Peter Coleman said last month that any rival would need to negotiate with him by September to get their gas into an infrastructure system led by Woodside.
"They really need to get to us in the third quarter and be very serious about what they're doing, because that window will close," he said at an investor briefing.
Chevron has not put a cost estimate on its infrastructure plan, saying it depends on how big any trunkline is and how many fields it connects to. Woodside has not given an exact estimate of costs for a shared project that it would lead.
"Talk of collaboration is good rhetoric, but there are an awful lot of moving parts," said Wood Mackenzie analyst Saul Kavonic.
BHP and BP declined to comment. Shell declined to comment except to reiterate that its Australian head, Zoe Yujnovich, has called for "greater cooperation between ventures to reduce waste and duplication".
Chevron and Woodside are key in Australia's LNG sector as they operate the four LNG plants in Western Australia, and between them have a total of more than 60 trillion cubic feet (Tcf) of undeveloped gas resources in the region's offshore Carnarvon and Browse basins.
12
View Full Article
WHAT DO YOU THINK?
Generated by readers, the comments included herein do not reflect the views and opinions of Rigzone. All comments are subject to editorial review. Off-topic, inappropriate or insulting comments will be removed.
- Weatherford CEO's Rebound Plan Relies On Getting Smaller
- Iran Says Oil Market Is Too Tight For US Zero Exports Target
- China's Squeezed 'Teapots' Eye Petchem Path To Riches
- Baker Hughes: US Drillers Add Oil Rigs For Second Week In Three
- Venezuela Hands China More Oil Presence, But No Mention Of New Funds
- ExxonMobil Racks Up Discoveries in Guyana Block Eyed by Chevron
- Oil Market Sentiment Has Improved Significantly
- EU, US Eye Collaboration on Nuclear Materials
- USA Driving Activity to Increase to All-Time Highs
- TC Energy to Sell Prince Rupert Gas Pipeline Project to First Nation
- EU Electricity Export to Ukraine Up 94 Percent in Two Years
- China Coal Output Falls for First Time since Government Ordered More
- BP Pulse Buys One of Europe's Largest Truck Stops
- UK CCUS Plans Outdated: Think Tank
- North America Enters Rig Loss Streak
- Norway Regulator Blasts Proposal to Halt New Oil and Gas Permits
- Chinese Mega Company Makes Major Oilfield Discovery
- EIA Drops 2024 Henry Hub Gas Price Forecast
- EIA and Standard Chartered Offer Up Latest Oil Price Predictions
- Red Sea Region Sees Another Watershed Incident
- Chevron Oil Project in Kazakhstan to Cost $48.5B
- OPEC Voices Encouragement after IEA Affirms Support for Oil Security
- Biden Govt Bares Strategy for Freight Charging, Hydrogen Fueling Infra
- Ukraine Hits Third Russian Refinery In Escalating Drone Strikes
- Rystad Looks at the Buzz Around White Hydrogen
- VIDEO: Missile Attack Kills Crew Transiting Gulf of Aden
- Norway Regulator Blasts Proposal to Halt New Oil and Gas Permits
- Chinese Mega Company Makes Major Oilfield Discovery
- What Is the Biggest Risk to Offshore Oil and Gas Personnel in 2024?
- Is Peak Oil Demand Close?
- Vessel Sinks in Red Sea After Missile Strike
- JP Morgan, Standard Chartered Reveal Latest Oil Price Forecasts
- Exxon Rights in Stabroek Do Not Apply to Hess Merger with Chevron: Hess
- Rystad Forecasts Net Production of Top Permian Producers in 2024
- Analysts Reveal Latest Oil Price Outlook Following OPEC+ Cut Extension