WOODSIDE Petroleum has proposed a scaled-back expansion of its Pluto LNG project at Karratha to potential suppliers of third-party gas, as it looks for growth options following an unsuccessful exploratory drilling campaign.
The company reported a 2 per cent drop in net profit to $812 million for the first half of 2012, marred by one-off expenses associated with the commissioning of Pluto.
Chief executive Peter Coleman revealed Woodside had proposed construction of smaller LNG trains - or processing units - to potential suppliers, believed to include BHP Billiton and Hess, to optimise capital expenditure. Previous discussions assumed new trains would be multiples of the existing 4.3 million-tonne-per-annum single-train plant at Karratha, but Mr Coleman said future trains could be smaller and ''far less costly''.
Woodside said the proposal had been put to other resource owners and had ''a lot of interest to them''.
After delays and cost blowouts, Woodside spent more than $US15 billion on the first train at Pluto, which shipped its first gas in May, and needs to expand the plant to maximise the return on capital invested. Analysts remain concerned about a lack of growth opportunities for Woodside, with the massive Browse and Sunrise projects facing uncertainty and delay.
Mr Coleman yesterday welcomed Royal Dutch Shell's decision to assume Chevron's stake in the Browse project via an asset swap, lifting its stake to 26 per cent.
The deal increases the likelihood that Browse gas could be developed using Shell's new ''floating'' LNG technology. Mr Coleman said tenders covering five currencies and thousands of pages had been received for the base case James Price Point development option and the Browse partners were on track to take a final investment decision by the first half of next year. Woodside shares slumped $1.10, or 3 per cent, to $34.90 - despite record first-half revenue of $US2.7 billion, up 18 per cent on the previous year, and a 4.5 per cent jump in underlying profit to $US865 million - after one-offs including $28 million associated with delayed delivery from Pluto LNG and $25 million in tax to the government of East Timor following the sale of a subsidiary.
Woodside paid an extra $11 million in petroleum resource rent tax.