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Wheatstone LNG project costs escalate

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LNG Industry,

Woodside has announced that it expects an 8% rise in its expected costs to the Wheatstone LNG project. The announcement follows Chevron Corp.’s statement that project costs would jump to $34 billion, following a $5 billion cost blowout due to delays in module deliveries.

A statement from Woodside read: “The Wheatstone Project cost update includes significant costs to which Woodside has no exposure. The cost update referenced the original 2011 final investment decision budget estimate issued prior to Woodside joining the Wheatstone Joint Venture […] Woodside is reviewing the cost update received from the Wheatstone Project operator after ASX market close on 28 October 2016. Woodside’s initial view is the cost update results in an increase in Woodside's total capital costs of less than 8% in comparison to the guidance provided in February 2016.”

The Wheatstone LNG project is expected to produce first LNG from Train 1 in mid-2017, with first LNG from Train 2 expected six to eight months later. The Woodside-operated Julimar Project, which will supply gas to the Wheatstone Project, recently completed all construction and commissioning work on schedule and under budget.

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