Woodside Grants 4 Contracts for Scarborough Gas Project

- January 16th, 2019

Scarborough is a joint venture between Woodside, which owns 75 percent, and international mining major BHP, which holds the remaining stake.

Australian energy producer Woodside Petroleum (ASX:WPL,OTCMKTS:WOPEY) has awarded four contracts for front-end engineering design activities at its proposed Scarborough project.

The Scarborough gas resource is located in the Carnarvon Basin, roughly 375 kilometers northwest of the Burrup Peninsula in Western Australia.

The recently awarded contracts outline engineering activities for the upstream development of a floating production unit and export trunkline, as well as subsea umbilical risers and flowlines.

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The Scarborough project is a joint venture between Woodside, which owns 75 percent, and international mining major BHP (ASX:BHP,NYSE:BHP,LSE:BLT), which holds the remaining 25 percent.

Woodside’s development plans for Scarborough include 12 subsea, high-rate gas wells tied back to a semi-submersible floating production unit. The production unit will be moored at a water depth of 900 meters, close to the Scarborough field.

The gas produced at the site will be transported by a 430-kilometer pipeline to existing liquefied natural gas (LNG) infrastructure on the Burrup Peninsula.

The floating production unit contract has been awarded to McDermott Australia, a well-known marine construction and engineering services company. McDermott will initially undertake engineering studies for the floating production unit, with an option to progress to an engineering, procurement and construction contract.

A consortium between private companies OneSubsea Australia and Subsea 7 Australia Contracting, dubbed Subsea Integration Alliance, has been selected to perform an engineering study for the subsea umbilical risers and flowlines.

It will also have the option to progress to an engineering, construction and installation contract.

“We have made good progress since announcing last year that we had increased our stake in Scarborough,” Woodside CEO Peter Coleman said in the ASX announcement. “The award of these contracts brings us closer to unlocking the Scarborough resource.”

Of the final two contracts, one went to Saipem Australia to provide export trunkline engineering support services with an option to execute line pipe coating and installation activities. Intecsea was chosen for export trunkline engineering.

“We want to continue to maintain the momentum that has been generated during 2018 towards a targeted final investment decision in 2020,” added Coleman.

The end goal for Woodside is to transport gas from Scarborough through the 430-kilometer export pipeline to the Burrup Peninsula to be processed onshore at the company’s expanded Pluto LNG facility.

Shares of Woodside were up 1.33 percent on Wednesday (January 16), trading at AU$33.52.

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Securities Disclosure: I, Georgia Williams, hold no direct investment interest in any company mentioned in this article.

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