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Woodside plans offshore California LNG system Australian company hopes to sidestep concerns about terrorism, environmental problems with tankers that can regasify LNG onboard Allen Baker For Petroleum News
Woodside Petroleum Ltd. is abandoning the traditional route for bringing Australia’s LNG into the California market, announcing it would use offshore regasifying tankers instead. The system used by Woodside would be similar to the Gulf Energy Bridge that Excelerate Energy LLC put into operation in the Gulf of Mexico last March, using an underwater buoy 116 miles offshore.
The Australian company said Jan. 19 that it would put its OceanWay unloading operation at least 15 miles off the coast of California. Several sites are being considered, the company says, with Woodside looking for a site well removed from population centers, with safe oceanographic conditions and minimal on-shore disruption.
Approvals will be needed from the U.S. Coast Guard and the California State Lands Commission, the company said, and probably the Federal Energy Regulatory Commission and others as well.
Woodside had been a backer of the Crystal Energy LLC proposal for an offshore LNG terminal on a former oil platform, but withdrew from that project last summer. Most other projects stalled Competitor Sempra Energy of San Diego is building a terminal in Baja California, just south of the U.S.-Mexico border, but other projects to serve the California market have been stalled by controversy. Australian rival BHP Billiton wants to build a terminal 14 miles off the coast near Malibu. ConocoPhillips and Mitsubishi Corp. have proposed an onshore facility in Long Beach.
Shipments for the Woodside venture would start in 2010, the company said, with the aim of bringing ashore 700 million to 1.4 billion cubic feet of natural gas daily. It would take several ships to make deliveries at that rate, with each ship costing in the neighborhood of a quarter to a third of a billion dollars. So it’s an expensive proposition.
But Woodside wants to fast-track its $3.7 billion Pluto project offshore Western Australia, and it also could send some of its share of LNG from the North West Shelf venture, which it operates. The Browse and Sunrise fields could also provide fuel, possibly via an expanded LNG liquefaction plant in Darwin. Pluto is expected to produce 7 million tonnes of LNG annually, which converts to nearly a billion cubic feet of gas per day.
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