LNG

Woodside Energy, the Australian LNG plants operator with overseas assets in the US and Senegal, and UK major Shell are moving forward with separate oil and gas project, the Trion joint venture for Woodside and Shell’s Sparta deep-water development located in the Mexican and US portions of the Gulf of Mexico.

Woodside said it awarded a major contract to Mexican company Eseasa Offshore SA to supply shore base facilities and services for Woodside’s operations supporting the Trion oil and gas project offshore Mexico.

Woodside operates the Gulf of Mexico field, located in a water depth of 8,202 feet (2,500 metres), with a 60 percent stake while state-owned Petroleos Mexicanos (Pemex) holds the remaining 40 percent of the field discovered in 2012.

Support role

“The Mexican owned and operated company demonstrates the great capacity available in-country to support a world-class oil and gas project like Trion,” said Woodside Vice President for Trion Stephane Drouaud.

“It also reinforces Woodside’s commitment to investing locally and ensuring that the economic benefits of our investment in Trion are felt as broadly as possible across Mexican suppliers,” Drouaud stated.

“Eseasa will provide a broad range of services out of its shore base location on the Panuco River coastline The award of the contract is critical as we continue to progress the Trion project toward first oil in 2028,” he added.

Eseasa’s scope of includes shore base infrastructure, operations planning and management for vessel mooring, loading and discharge and freight and material management and dedicated laydown and staging areas.

Shell Offshore Inc., a subsidiary of London-headquartered Shell plc, said a final investment decision has been made the for Sparta field, a deep-water development in the US Gulf of Mexico that represents a “competitive approach” for Shell to simplifying and replicating projects.

Shell and Equinor

Shell Offshore owns 51 percent of Sparta and is the operator and Norway’s Equinor owns the remaining 49 percent.

Sparta is expected to reach a peak production of around 90,000 barrels of oil equivalent per day and currently has an estimated discovered recoverable resource volume of 244 million boe.

Sparta will be Shell’s 15th deep-water host in the Gulf of Mexico and is currently scheduled to begin production in 2028.

“Shell’s latest deep-water development demonstrates the power of replication, driving greater value from our advantaged positions,” said Zoë Yujnovich, Shell’s Integrated Gas and Upstream Director.

“This investment decision is aligned with our commitment to pursue the most energy-efficient and competitive projects while supplying safe, secure energy supplies today and for decades to come,” she added.

Shell explained that Sparta was building on more than 40 years of deep-water expertise and marks Shell’s first development in the Gulf of Mexico to produce from reservoirs with pressures up to 20,000 pounds per square inch.

The Sparta development spans four Outer Continental Shelf blocks in the Garden Banks area of the US Gulf.

“Sparta will feature a semi-submersible production host in a depth of more than 1,400m/4,700ft of water, initially with eight oil and gas producing wells,” Shell said.

EQT Corp., the leading US natural gas producer in the Appalachia Shale Basin of the northeast US, said it was seeking overseas LNG customers after signing a second accord with a US Gulf Coast project and this time with the proposed Commonwealth LNG venture in Louisiana.

Woodside Petroleum, the operator of two LNG export plants in Western Australia, posted a 12 percent first-quarter increase in oil and gas production, though prices were down 20 percent along with revenues from the same three months a year ago.

Woodside, one of the biggest regional suppliers of LNG cargoes to North Asia, reported sales revenue of US$1.08 billion for the quarter ended March 31, down from US$1.36Bln a year earlier.

Production came to 24.2 million barrels of oil equivalent, up from 2.17M boe as the company mitigated the impacts of Tropical Cyclone Damien during the quarter.

Total LNG output for Woodside rose 4.5 percent to 18.31M boe from 17.53 boe in the prior-year quarter.

At the same time, Woodside like all other companies in the industry implemented responses to the combined effects of the Covid-19 outbreak and lower commodity prices.

Woodside’s first-quarter one-sixth share of LNG sales at the North West Shelf plant in Western Australia came to 606,577 tonnes, down from 652,246 tonnes in the same quarter of 2019.

The Perth-based company’s sales from its stake in the Chevron-operated the Wheatstone plant in the Pilbara region of Western Australia rose to 236,185 tonnes from 175,932 tonnes in the 2019 quarter.

At Woodside’s single-Train Pluto LNG plant sales amounted to 1.163 million tonnes in the quarter, up on last year’s 1.107MT.

“Tropical Cyclone Damien, which crossed the Western Australian coast in February, was the most significant weather event ever to pass over Woodside’s production facilities on the Burrup Peninsula,” stated Woodside Chief Executive Peter Coleman in the company's first-quarter report.

“Despite the severity of the storm, the team put in an outstanding effort to ensure the safety of our people and our assets and restore normal operations in a matter of days,” added the CEO.

“Nevertheless, revenue for the quarter was impacted by reduced trading activity and lower realised prices due to Covid-19 and an unprecedented combination of oversupply and short-term demand destruction,” stated Coleman.

“Of course, most of the quarter was overshadowed by the growing threat of the Covid-19 pandemic, which has required us to take swift and decisive action to protect our workforce, communities and operations,” he said.

Coleman noted that the company had already made “tough but prudent decisions” to ensure the financial integrity of the business with spending cuts in 2020 of 50 percent.

“A targeted final investment decision on our Scarborough and Pluto Train 2 developments has been deferred from this year to next,” said Coleman.

“We made solid progress on our near-term growth projects during the quarter, taking FID on Sangomar Field Development Phase 1 in Senegal and the North West Shelf’s Greater Western Flank Phase 3, as well as making significant execution progress on Pyxis Hub and Julimar-Brunello Phase 2,” he added.