LNG

The Australian energy industry has been unsettled by environmental activists using an Aboriginal woman and additionally citing concern for whales and managing to persuade a Federal Court to delay Woodside Energy’s US$12 billion Scarborough gas project for LNG expansion, citing seismic testing approval deficiencies.

The Scarborough gas project is one of the few moving forward in Australia and has been specially targeted by environmental activists who have now succeeded in delaying Woodside’s plans as the previously approved seismic testing programme has now been called into question.

The Australian Federal Court by a decision handed down on September 28 has invalidated approvals given to Woodside by the National Offshore Petroleum Safety and Environmental Management Authority (NOPSEMA).

Perth-based Woodside has yet to issue a formal response to the court decision.

Previous ruling

The Supreme Court of Western Australia had previously, in March 2022, dismissed two proceedings brought against the Pluto LNG and Karratha Gas Plant environmental approvals given in 2019.

In the latest hearing, Justice Craig Coleman found that NOPSEMA, did not have the statutory power to accept Woodside’s environment plan because he wasn’t reasonably satisfied that all relevant stakeholders had been consulted, including some local Aboriginals.

The Pluto LNG onshore processing facility is located on the Burrup Peninsula near Karratha in the northwest of Western Australia and the first cargo from the current single-Train facility was delivered in 2012.

The second Train planned using Scarborough field gas will have 5 million tonnes per annum of output and take total nameplate capacity to around 9.2 MTPA.

The Scarborough field is located about 375 kilometres (233 miles) off the coast of Western Australia and is estimated to contain over 11 trillion cubic feet of dry gas.

Aboriginal voice

In the Court decision to delay, the environmentalists had called on an Aboriginal woman named as Raelene Cooper to seek a court injunction to reverse the seismic testing approval, citing opposition from the “traditional custodians” of the Burrup Peninsula who seemingly had never been properly consulted.

After the ruling a statement was released on behalf of Mrs Cooper in which she said she was “elated” by the decision and described the legal win as more than a personal victory.

“I want my mob back home to be empowered by this day today. This is bigger than me,” she said. “It's about my people and our history. We've been forgotten and treated so badly,” the woman added.

“Woodside just came and told us what was happening,” she said. “They never bothered to sit down and listen to Murujuga traditional custodians about the full impacts of their Burrup hub operations on our culture and our sacred song lines,” she stated.

BW Offshore, the platforms company listed on the Oslo stock exchange, has formed a partnership with global infrastructure investors for the equity financing of the floating storage and offloading (FPSO) unit for the Barossa gas field offshore Australia to prolong the lifespan of the Darwin LNG plant.

BW Offshore already has a fleet of 14 FPSOs with potential for growth to meet the reliable clean energy needs provided by natural gas.

The Barossa FPSO Services contract has an initial production period of 15 years, with options to extend the production period (in the aggregate) for a further 10 years.

The contract value based on the initial production period of 15 years is US$4.6 billion.

BW Offshore will be responsible for engineering, procurement, construction, installation, and operation of the FPSO.

The FPSO will be turret moored with a new built hull based on BW Offshore's Rapid-Framework design.

Initial gas production from the FPSO is expected during the first half of 2025.

The Barossa FPSO will be financed by a 14-year combined construction and long-term debt facility of US$1.15Bln and US$240 million from the equity joint venture.

Pre-payments

There will also be around US$1Bln in pre-payments by the Barossa gas field operator, Adelaide-based LNG and energy company Santos, and the Barossa Upstream joint venture partners during the construction period.

“The joint venture agreement has been signed by all parties and completion of the agreement is subject to certain customary regulatory approvals which are expected within the next month,” said BW Offshore.

The FPSO joint venture comprises BW Offshore with 51 percent and with a further 25 percent held by ICMK Offshore Investment, a venture comprising Japan’s Itochu Corp. and a subsidiary of the Japanese Meiji Shipping Group.

The Australian financial group, Macquarie Bank, will own the remaining 24 percent.

Santos, which is currently finalizing its agreed take-over of Papua New Guinea LNG stakeholder Oil Search, took a positive final investment decision in March 2021 on the Barossa field development.

The Barossa project represents the biggest investment in Australia’s oil and gas sector since 2012.

The Santos-operated Darwin liquefaction plant in the Northern Territory has the capacity to produce around 3.7 million tonnes of LNG per annum, mainly for Japanese buyers.

Santos has said Barossa and Darwin LNG life extension will create 600 jobs throughout the construction phase and secure 350 jobs for the next 20 years of production at the Darwin facility.

The FID came a year after Santos completed the acquisition of the assets of US major ConocoPhillips in northern Australia and the Timor Sea, including the existing offshore Bayu-Undan field providing the feed gas now for Darwin.

The Barossa development will comprise the FPSO, subsea production wells, supporting subsea infrastructure and a gas export pipeline tied into the existing Bayu-Undan-to-Darwin LNG pipeline.