(EnergyAsia, March 27 2012, Tuesday) — Australia’s third liquefied natural gas (LNG) project started up last week when operator Woodside announced that its Pluto project in Western Australia began processing gas from offshore fields last week.

The A$14.9 billion project has been plagued by cost over-run of up to A$1 billion, and weather problems and design flaws that have led to start-up delays by a year.

Peter Coleman, CEO of Woodside, which has a 90% stake in the project, said:
“This milestone is a credit to all those involved in the construction of Pluto, which proudly takes its place as Australia’s third LNG project. Woodside operates two of these projects.”

The first LNG cargo will be produced in a matter of weeks for delivery to Pluto’s Japanese foundation customers and project participants Kansai Electric and Tokyo Gas.

Woodside said Pluto is expected to contribute between 17 and 21 million barrels of oil equivalent to its 2012 production, in line with previous guidance, and about 37 million boe to the company’s long-term average production.

The Greater Pluto fields are estimated to contain 5.5 trillion cubic feet of proved plus possible dry gas reserves and an additional 680 billion cubic feet of contingent resources. The project’s initial phase comprises an offshore platform in 85m of water that is connected to five subsea wells on the Pluto gas field.

Approved for development in July 2007, the onshore complex will process gas piped through a 180 km trunkline from the Pluto and Xena gas fields located in the Carnarvon Basin about 190 km north-west of Karratha, Western Australia. The complex, located between the North West Shelf Project and Dampier Port on the Burrup Peninsula includes a single processing train with a production capacity of 4.3 million tonnes of LNG a year.

Storage and loading facilities at the plant include two LNG tanks with a combined capacity of 240,000 cubic metres, three smaller condensate tanks and an LNG and condensate export jetty.

The Pluto LNG project is underpinned by 15-year sales agreements with Kansai Electric and Tokyo Gas. Both companies became project participants in January 2008, each acquiring a 5% interest in the foundation project.

With the start-up of Pluto, Australia now has seven LNG projects under development. The country’s LNG boom started in 2009 when Chevron began developing its 15 million mt/year Gorgon project on Western Australia’s Barrow Island and took off in late 2010 with BG Group’s approval for the world’s first coalseam gas (CSG)-to-LNG project on Curtis Island in Queensland state.

The other projects include another two CSG-LNG plants also on Curtis Island by undertaken separately by Santos and Australia Pacific LNG  JV, Shell’s floating LNG terminal to tap the Prelude gas field in the Timor Sea, Chevron’s plan to develop the Wheatstone field, and Japan’s Inpex plan to build a A$34 billion Ichthys complex in Darwin city.