Woodside Petroleum, Australia’s biggest listed oil and gas explorer, is slowing down the marketing for its proposed Scarborough development due to weak prices for liquefied natural gas (LNG), the company’s chief executive says.
LNG prices in Asia are currently at their lowest in nearly 19 months amid slow demand and plentiful supplies.
‘There has been a lot of interest in the gas, so there is certainly demand out there but the pricing though … is really poor,’ Peter Coleman, Woodside Petroleum managing director and chief executive officer, told Reuters on the sidelines of LNGA 2019 conference in Singapore on Wednesday.
‘We are just slowing down our marketing activities a little bit … but (we) really want to give people momentum in the project before we go full steam on marketing again,’ he said.
Woodside outlined in May last year its plans to accelerate and expand its Scarborough gas project off northwestern Australia, at an expected cost of $10 billion.
Woodside in January pledged between $1.6 billion and $1.7 billion towards projects this year, with most of that flowing into early work on its Scarborough and Browse gas developments, and expansion of its Pluto LNG plant in Australia. The company aims to double LNG production by 2027.
The capital raising last year was partly to help Woodside buy a 50 per cent stake in Scarborough for $744 million, giving it a total stake of 75 per cent.
It is now looking to sell up to 50 per cent of the equity in the Pluto LNG train that will process the Scarborough gas and up to 20 per cent equity in the offshore field, he said.
‘We have a lot of interest in that. We’ll start to get more traction in that area around second quarter of this year,’ he said. Woodside has received interest from multiple parties across Asia and the Middle East, Coleman said, although he declined to name any of them.
Outside of Australia, the company is expecting a final investment decision on its Senegal oil development by second half of this year, adding that this week’s confirmation of President Macky Sall as the winner of a February 24 election was positive news for the project’s stability.
In Canada, Woodside is still committed to developing the Kittimat LNG project with project partner Chevron Corporation, though it does not expect it to start up until after 2027.
‘So that means we have to start work on it over the next couple of years, so we can see a lot more movement,’ Coleman said, adding that the project partners are still working out the right structure to develop the project.