Woodside is starting work on a new study to find the best development concept for its Browse project offshore Western Australia now that it has officially ruled out the use of a floating LNG (FLNG) solution.

“Following the completion of front-end engineering and design [FEED] work, the Browse joint venture (BJV) participants decided not to progress further with the floating LNG development concept selected at FEED entry in June 2015,” Woodside said last week.

“The BJV participants are now preparing a new work program to assess and concept select phase activities. It is anticipated that a range of concept options will be considered.”

The initial concept called for the use of three FLNG facilities, but in March 2016 Woodside completed FEED work for this option and decided to put the development on ice due to the poor economic environment.

The Browse FLNG development concept was based on three FLNG facilities using Shell’s FLNG technology and Woodside’s offshore development experience to exploit the Brecknock, Calliance and Torosa fields that hold gross contingent resources (2C) of 436.3 Bcm (15.4 Tcf) of dry gas and 453 MMbbl of condensate.

Even when Woodside shelved the project last year, CEO Peter Coleman said the company remained committed to the FLNG solution despite the delay.

However, Woodside’s quarterly report suggested this is no longer the case, with a move away from FLNG possibly on the cards. Now the company states on its website that the FLNG is not being pursued any longer.

Woodside said it has made significant progress in “narrowing alternative concepts” for the Browse development.

“Woodside prefers a concept utilizing existing LNG process infrastructure on the Burrup Peninsula, subject to reaching acceptable terms with the Burrup infrastructure owners. Woodside continues to target the selection of a Browse development concept in second-half 2017,” the operator said.

The partners in Browse are: Woodside (30.6%), Shell (27%), BP (17.33%), Japan Australia LNG (14.4%) and PetroChina International Investment (10.67%).

Startup Planned For Mid-2020s

Despite the ongoing search for the optimum development solution, Woodside forecasts that first gas from its Browse project will be achieved in the mid-2020s, according to Coleman.

When Coleman confirmed that the FLNG option has been abandoned, he added, “As you know, we have worked for some years to find the right development concept for the world-class Browse resources. I’m very excited about where we are headed. Now conditions are aligning for us to look closely at an opportunity to basically double the life of the North West Shelf by bringing the Browse resources into it.”

Using the existing facilities has the dual advantage of ensuring the most efficient use of capital, while minimizing risk by relying on proven technologies.

“As operator of both Browse and the North West Shelf, Woodside is well placed to make this happen, and we are talking to joint venture participants in both assets. It is still early days, but we think this is a compelling option and could be achieved at a competitive price and in a reasonable time frame,” he added.

Woodside predicts tightening in LNG in the next few years due to the growth in demand from new markets and the current challenging conditions for new large-scale developments.

“These factors point to a supply shortfall in the 2020s, adding to the case for developing Browse. We anticipate that first gas from Browse could enter the North West Shelf plant from the mid-2020s, coinciding with the forecast supply crunch,” Coleman said.

Scarborough Could Use FLNG

While the FLNG solution is a nonstarter for the Browse fields, there is another project Woodside is still working on that could be well suited to FLNG facilities: the Scarborough gas field off Australia, which sees Woodside teaming up with U.S. big hitter ExxonMobil.

Scarborough was discovered in 1979 in the Carnarvon Basin off Western Australia. The remote gas field lies about 220 km (137 miles) northwest of Exmouth at a water depth of 900 m (2,953 ft). Woodside acquired a stake in Scarborough last year.

Woodside said development concepts being considered for Scarborough are an FLNG facility or use of existing LNG process infrastructure on the Surrup Peninsula. Both concepts will be studied and evaluated this year.

In January Woodside said that a final investment decision for the Scarborough is scheduled in 2020.

Prelude FLNG 2018 Start

Meanwhile, Shell’s Prelude FLNG, which will be the world’s largest offshore facility, is set for completion and startup in 2018—despite a fatal incident at the Samsung Heavy Industries shipyard in South Korea last week.

The construction of the giant Prelude facility started in 2012. Once completed, it will be deployed offshore Australia and will produce 3.6 m tons of LNG a year by using natural gas from the Prelude and Concerto gas fields located about 475 km (295 miles) north-northeast of Broome.

During a conference call on first-quarter 2017 results, Shell’s CFO Jessica Uhl was asked about the progress of the construction of the Prelude FLNG, and she said Prelude remained on schedule.

“We’ve indicated that startup was in 2018, and we remain confident in that timing,” Uhl said.

After the completion of all work at the shipyard in South Korea, the FLNG facility will be towed to its operating location offshore of Western Australia. The Posh Terasea will conduct the tow using five vessels. Once at location the facility will be moored and connected to the subsea infrastructure, with the whole production system then to be commissioned.

—Steve Hamlen