Speaking at the AOG Energy conference in Perth, Woodside executive vice president development Meg O’Neill has reinforced that despite all the market turmoil, demand for liquefied natural gas (LNG) remains robust.
“In 2020 demand for LNG held up. In fact, the LNG trade grew globally, and growth was strongest in the Asia Pacific, where demand grew almost 3 per cent year-on-year,” O’Neill said.
“At a time when global energy demand was unpredictable and volatile, LNG offered customers the flexibility to adjust to those fluctuations in demand.”
Following Wood Mackenzie’s release in January, which outlined LNG demand growth in Asia set to increase by 10 per cent through 2025, O’Neill highlighted that the outlook for natural gas is strong, but the outlook for LNG is stronger.
“LNG is expected to play a sustained role in the energy transition underpinned by a growing demand from Asia and a growing role for LNG in marine bunkering,” she said.
“But the increasing focus on combating climate change means LNG will need to earn its place in the energy mix by being both low carbon and cost competitive. It’s not enough to just claim these advantages – we are going to have to demonstrate and verify those claims. There will increasingly be an expectation that LNG cargoes have their carbon content covered as part of the sale.”
O’Neill further outlined that Woodside is now preparing for a final investment decision on its Scarborough project and the expansion of the Pluto LNG facility in the second half of this year.
Woodside, like other companies in the industry, has outlined its aspirations to achieve net zero for its direct emissions by 2050.
The Scarborough project is located close to core Asian markets and is set to be a resource with low emissions intensity and very low to near zero CO2 in the reservoir.
“These targets are being applied across our portfolio and we are using a range of levers to achieve them, including deploying cutting edge technologies to design out emissions at new facilities like Pluto Train 2 and introducing efficiencies to operations in our existing assets to limit their future emissions,” O’Neill said.
Last year at the conference Woodside announced that it was part on an industry initiative to provide its suppliers with transparency for upcoming work packages.
O’Neill confirmed that the company is now seeing strong interest in Scarborough from customers, with it contracting half of its expected equity off take gas.
“We are confident that the introduction of a second onshore train at Pluto, 13 new wells, subsea infrastructure, a 430km trunkline and 30,000t topsides floating production unit will provide a wide variety of opportunity to industry throughout the project life,” she explained.
“Of course, one of the very first steps we took towards the development of Scarborough was signing an agreement for the provision of gas to local industry. Back in 2018, we reached agreement with Perdaman that Scarborough would supply pipeline gas for 20 years for use in their proposed urea plant. Locking in supply of gas to local industry was a priority for Woodside and aligns with Western Australia’s domestic gas reservation policy.”
In addition, the company has been working to transform the North West Shelf Project into a third-party tolling facility, with two recent agreements executed for Pluto and Waitsia gas.