Australia Pluto LNG Project Production Salvo Up, Higher Cashflows Expected
In what could be a sign of vindication to its earlier construction delays, initial production of Australia's newly-commissioned Pluto liquefied natural gas (LNG) Project by Woodside Petroleum Ltd. has been three times more versus what has been forecast for the month of May.
Over a strategy briefing in Perth on Monday attended by about 85 analysts and investors, Lawrie Tremaine, Woodside Petroleum Ltd. chief financial officer, said the Pluto LNG project has achieved a ramp up utilization level of 65 per cent, compared to company projections of 20 per cent. The gas terminal went online only just late April. So far, it has already shipped two LNG cargoes to customers in Asia.
"In the past week the (Pluto processing) train has been operating reliable at 95 per cent of capacity but I caution you that it is still early days," The West Australian quoted Mr Tremaine as saying.
Located in Western Australia in the Northern Carnarvon Basin, the Pluto LNG project is a 2008 joint venture between Woodside Petroleum Ltd., Tokyo Gas and Kansai Electric Power. Woodside Petroleum Ltd. holds majority stake of the Pluto LNG project at 90 per cent, while five per cent each for Tokyo Gas and Kansai Electric Power.
For 2012, the $15 billion Pluto LNG project is expected to yield between 17 million and 21 million barrels of oil equivalent. Woodside Petroleum Ltd. said its total production outlook is between 73 million barrels to 81 million barrels of oil equivalent.
Meanwhile, Woodside Petroleum Ltd. said it has been eyeing opportunities not only in Australia but also overseas to expand its business portfolio, amid assurances to shareholders it will return their money should the company not pursue plans on its other LNG plans, including the Browse LNG terminal.
"Developing our significant discovered, undeveloped resources, particularly at Browse and Sunrise, and further leveraging our infrastructure at Pluto, remains our priority," Mr Tremaine said in the Business Spectator.
"While we remain committed to our growth aspirations, to the extent that growth is delayed, or our investment criteria is not met, we will be in a position to return cash generated by the business to shareholders," he added.
Woodside Petroleum Ltd. has so far reached LNG sales prices of $75 a barrel this year, versus the $58 a barrel in 2011, according to Mr Tremaine.
"Woodside Petroleum Ltd. is well positioned to support our existing projects and to pursue our new projects," the company said in briefing notes.