Following requests from investors, Woodside had a special focus this morning on its growth and its future, at which managing director Peter Coleman laid out his three "horizons" as part of an investor briefing day.

 

The first horizon is the immediate future, between 2017-21, and will be achieved via growth at Wheatstone, Greater Enfield, Greater Western Flank 2, a Pluto expansion and Senegal.

 

The second horizon - which represents the time period which Chevron Australia general manager, asset development Gerry Flaherty told the Society of Petroleum Engineers' Asia Pacific Oil & Gas Conference in Perth late last year was of critical importance - is between 2022 and 2026.

 

During this time, Woodside has "value locked" but undeveloped value in Scarborough, Browse and Myanmar.

 

The third horizon is to replicate that success at Kitimat in Canada, develop Sunrise and work on achieving further exploration discoveries from 2027 onwards.

 

On the Sunrise front, he said work was being done in the background, including in diplomatic relations.

 

Flaherty told Energy News at APOGCE that Western Australia's LNG industry needed to create an "interconnected basin" to stay competitive beyond 2023.

 

"At a time when future developments are challenged, you need to see places where you can put compression and water separation where multiple people can use it; and create opportunities to tie in fields with some commercial structure that can bring things together [so] it doesn't have to just be one operator investing in it," he said.

 

"So what really unlocks the Carnarvon Basin in the future - when you see how big and spread out it is - I look at is as a tentative North West Shelf centre, a Gorgon-Jantz-Wheatstone-Pluto centre than [an] Exmouth-Scarborough [centre]."

 

Coleman spelled out what could be a key piece in this jigsaw, and said Woodside was "uniquely positioned to be the basin leader in the Carnarvon-Exmouth basin and bring current undiscovered resources into existing assets".

 

"The oil and gas industry is all about unincorporated joint ventures with voting rights, which are not a 50+1 voting right, and they're often unanimous. That is designed to protect the smallest player, not the largest," he said.

 

"These are the things we have to deal with, and the complexity of it all. Some may argue that this is like playing lots of chess pieces and trying to get alignment between the different owners.

 

"Of the four major resources that aren't developed, Woodside is an operator in three of them and a partner in the fourth, so we have an opportunity to lead all this together and create a truly value-adding hub around the Burrup peninsula."

 

But he also warned of the inherent challenges that lay therein.

 

"I won't tell you it's easy; it's not," he told the investors this morning, adding that discussion with the other NWSV owners would be the main consideration while Woodside finalised a standard tolling arrangement that will include both LNG and domgas components. 

 

Woodside has also had conversations with US oiler Hess on its stalled Equus opportunities, and there are Greater Gorgon resources that may need a home, and could meet the spare capacity that will become available in the NWS plant at Karratha from 2021-22.

 

Wood Mackenzie's Perth-based lead analyst for Australasia, Saul Kavonic, told Energy News this morning that the key challenge was maximising the value of existing infrastructure and the sharing of infrastructure upstream and downstream to "get the most bang for your buck".

 

"There's been a lot of capacity built into heaps of existing infrastructure," he said.

 

"So it doesn't matter whether it's Scarborough, Greater Gorgon or even the smaller fields, if you're going to develop any of those, are you going to then build the whole brand new upstream processing facility and pipelines all the way into the Burrup, or are you going to use, for example, the Pluto trunkline which already has spare capacity, to tie something into that?

 

"There are lots of different opportunities around the processing, pipelines and a bunch of other upstream infrastructure.

 

"So it's about maximising the value of what's already there."

 

Coleman confirmed this morning that an option was to utilise the Karratha gas plant ullage through a new Pluto transfer line, and Browse, being the largest uncommitted resources, was the highest value option for to fill that gap, with the likes of Scarborough to potentially follow.

 

There were also discovered gas and exploration that could also come through the KGP, including two exploration wells Woodside has in its portfolio which may be able to fill that gap and other smaller resources.

 

"The challenge for realising the value of what Peter [Coleman] and Gerry [Flaherty] are talking about is that it does require sharing of core LNG infrastructure amongst different participants who have slightly different, unaligned equity interests along that value chain."

 

In this way, complex negotiations are required to make that happen. 

 

"This is an area that partners along the North West Shelf have been very poor at in the past, but now with low prices and the new focus on costs, you're starting to see industry change, with these comments by Coleman now, that infrastructure sharing is being looked at much more seriously," Kavonic said.