The multibillion project will involve the development of the Pluto and Xena gas fields, located about 190 km from the Burrup Peninsula in the North West Shelf Area, which together contain approximately 4.5 trillion cubic feet (Tcf) of dry gas and approximately 48 million barrels (MMbbl) of condensate. Pluto will produce liquefied natural gas (LNG) for export and will also provide significant infrastructure for a domestic gas phase to supply the Western Australian domestic market in the future.
Development overview
Pluto’s initial phase will include a single LNG production train with forecast production of 4.3 MMt/a. The platform will be connected to five subsea big bore wells on the Pluto field, with first gas to be produced in late 2009. Capacity will increase to 5-6 MMt/a, but approvals have been sought for up to 12 MMt/a to allow for expansion.
Wellstream gas and liquids from the riser platform, including produced water, will be transferred via a subsea gas trunkline from the riser platform to shore for treatment in the initial years of operation. Once received at the onshore gas processing plant, the gas, condensate and other liquids will be separated. The gas will be processed into LNG, and the LNG and condensate will be piped to storage and export facilities. These facilities may also be used to process other gas from fields where Woodside has a stake.
Offshore development drilling for the Pluto gas field will be staged, commencing initially with three to seven wells and up to twelve wells in total as the field matures. Wellstream products will be delivered to an unmanned offshore riser platform located in water depths of 80-85 metres. The riser platform will not support any processing facilities but will be equipped with control systems to be provided by Honeywell.
Dredging commenced on schedule in late November and a number of major offshore and onshore contracts were awarded, including the Engineering Procurement Construction Management to a Foster Wheeler WorleyParsons joint venture.
Gas contracts
LNG from the project will be primarily delivered to Japan, under the multimillion dollar export deals signed last August with Tokyo Gas and Kansai Electric.
The agreement provides for the supply of up to 3.75 MMt/a of LNG from Woodside’s Pluto LNG development to Tokyo Gas and Kansai Electric for 15 years, beginning in late 2010. The agreement also provides an option to extend the supply contract for a further five years.
Last July, when Woodside gave the go-ahead to the Pluto project, it also approved the commencement of feasibility studies on an expansion of LNG capacity, through the addition of a second and third train – and a domestic gas facility to supply the Western Australian market.
The company committed about $300 million in additional infrastructure to facilitate future expansion for other Woodside or third party gas, allowing the onshore plant to operate as an open access facility with additional LNG trains. The size of subsequent LNG trains, and the technology used, will be evaluated during the study.
Challenges
The development has encountered two major technical challenges relating to the unique geological conditions in the Carnavon Basin.
“The variable nature of soil characteristics in the Carnarvon Basin made it challenging to develop a satisfactory platform foundation design for the Pluto LNG Project. An extensive geotechnical investigation program was used to arrive at the final design,”? said a Woodside spokesperson.
“Secondly, the selection of a suitable pipeline route from the platform to the gas processing facility at the Burrup LNG Park, and pipeline stabilisation methodology, also posed technical challenges due to the severe metocean conditions that exist in the Carnarvon Basin.”?
These challenges include strong tidal currents and severe winds in addition to highly mobile sediments in exploration and production. Furthermore, given the project’s location far offshore, it is exposed to marine conditions that are more difficult to predict including currents, which are determined less by tides and local winds, and more by large scale features of the ocean circulation.
Additionally, a project the size and scale of the $12 billion Pluto LNG Project presents a myriad of challenges to both onshore and offshore development, however with careful planning these are able to be surmounted.
“The high level of activity in the resources sector in Western Australia made it essential for Woodside to make early commitments on key offshore contracts. This approach ensured that critical vessels required for activities such as well delivery, pipe and flowline lay, platform installation and subsea hardware installation were secured in advance to meet the project’s schedule to deliver first gas by late 2010,”? the spokesperson said.
“Given the competing pressure on the Dampier Port from multiple users, the offshore team is carefully planning and managing offshore logistical activities to ensure the project maintains its fast pace.”?
Broader benefits
Not only will the development supply a number of major markets both locally and further afield, the Woodside spokesperson noted the myriad of potential benefits.
“The Pluto LNG Project will provide a reliable source of clean energy to Woodside’s customers in the Asia-Pacific region.”?
Beyond the environmental benefits of gas, Woodside has recently announced plans to make the project one of the most environmentally efficient LNG plants in the world with the co-development of a carbon sequestration plantation program to reduce the project’s emissions.
With first gas from Pluto expected by the end of 2010, Woodside has predicted its carbon emissions to increase to approximately 1.8 MMt/a. The company has reached a Key Terms of Agreement with CO2 Australia to invest up to $100 million over five years to reduce Pluto LNG’s environmental footprint.
The breadth of the environmental benefits of the development will also be matched by the economic benefits. The project is forecast to boost the West Australian economy by at least $28 billion over its lifetime and it will create up to 3,000 direct jobs during construction and 300 jobs during operations from 2010. Woodside also estimates a further 3,000 indirect jobs will be created, most of which will relate to services rendered in Western Australia.
“Woodside has also awarded a number of infrastructure fabrication contracts for the Pluto LNG Project to companies in Malaysia, Thailand, China and Japan that will create thousands of jobs for local people during peak construction,”? the spokesperson said.
Conclusion
With industry analysts estimating that LNG demand will triple as early as 2025, Pluto is well positioned to place Australia to service growth in the Asia-Pacific region by increasing its LNG output by potentially up to 12 MMt/a. Planning to commission the second and third trains of the Pluto project, Woodside expects to further capitalise on the myriad of economic and environmental benefits associated with the mammoth Pluto development, while surmounting both technical and broader challenges with judicious planning.
Woodside Chief Executive Don Voelte sums it up best when he notes that “Pluto is on schedule to be the fastest LNG project in the world from discovery to first gas, and the start of construction of the project is a very exciting time for Woodside.”?