Woodside Petroleum is close to clearing a major hurdle in its quest to bring production from its operated Browse development off Western Australia to the liquefied natural gas market after partners in the North West Shelf LNG facilities reached consensus on processing its gas.

Woodside revealed last week that the North West Shelf (NWS) joint venture partners had reached "alignment" over a tolling agreement to process gas from the US $15 billion development.

The Browse joint venture partners have been in agreement for some time over their preferred development option, which involves piping gas from the project to the onshore NWS facilities near Karratha, which Woodside also operates.

However, earlier this year it was revealed that not all of the NWS partners were in agreement over a tolling deal for Browse, with Woodside chief executive Peter Coleman saying that one of the six NWS partners was still yet to get “on-board” with the agreement.

Coleman indicated that all six companies — BHP, BP, Chevron, Japan Australia LNG (MIMI), Shell and Woodside — have now come to terms on the tolling arrangement.

“Subsequent to the quarter, alignment has been reached between the North West Shelf participants on non-binding key commercial terms and pricing for processing third-party gas through NWS infrastructure,” Coleman said in the company’s second quarter report last week, adding that a preliminary tolling agreement is expected in the third quarter.

Gas from Browse will be used to help keep the trains full at the 16.9 million tonnes per annum NWS LNG facilities, where spare capacity is expected to begin to open up in the early 2020s.

Upstream reported last month that the pre-front-end engineering and design phase was yet to start on Browse, however sources have said that pre-FEED tendering could take place once the tolling agreement with the NWS partners is out of the way.

The Browse development covers three offshore fields — Torosa, Brecknock and Calliance — which lie in water depths of up to 750 metres and are estimated to hold a combined best estimate contingent resource of 15.4 trillion cubic feet of gas and 453 million barrels of condensate.

The proposed development will see two floating production, storage and offloading vessels connected to the existing North Rankin complex via a 900-kilometre pipeline, with the first FPSO to start up roughly one year before the second.

Browse’s anticipated production capacity will be 10 million tpa of liquefied natural gas, 1.4 million tpa of domestic gas and 50,000 barrels per day of condensate.

Browse will help form part of Woodside’s Burrup hub concept, which will see its Pluto LNG facility linked to the NWS facility via a bi-directional interconnector pipeline, allowing the facilities to share gas. Woodside is currently carrying out work to build an expansion train at Pluto which will have the capacity for up to 5 million tpa of LNG, increasing the plant’s current 4.7 million tpa nameplate capacity.

Underpinning the Pluto expansion is the Scarborough development, where Woodside took over as operator after buying ExxonMobil’s 50% stake, increasing its own share in the project to 75%.

Woodside confirmed last week it had issued request for proposals to major suppliers for initial onshore engineering and execution planning for the proposed Pluto expansion, while Coleman also confirmed an accelerated timeline for Scarborough which had been initially been expected to start up in 2025.

“Woodside has accelerated target ready for start-up to 2023 for the upstream component and 2024 for the downstream to maximise the market opportunity,” he said.

Providing a further boost to the expansion plans at Pluto was last week’s confirmation Woodside had hit gas at the Ferrand-1 exploration well within its wholly-owned WA-404-P permit.

Ferrand-1 was drilled to a depth of 5035 metres using the semi-submersible Ensco MS-1 and intersected a 69-metre gross gas column.

Woodside said it was still assessing the find which, if commercial, will be used to help boost supplies to the Pluto LNG facilities.

Before drilling, Woodside had estimated Ferrand, which lies in a water depth of 1494 metres, to be a multi-trillion cubic foot gas prospect.

The positive news for its LNG developments came as Woodside booked a rise in second quarter production to nearly 22.1 million barrels of oil equivalent, in part due to the start-up of the Chevron-operated Wheatstone LNG project in Western Australia in which Woodside holds a 13% stake.

LNG production from Pluto also rose in the June quarter to nearly 1.2 million tonnes as the plant achieved 100% reliability and a production rate of 5.2 million tpa.

The rise in output, combined with higher average realised commodity prices, helped Woodside book a year-on-year increase in second quarter revenue from US$924.3 million to more than US$1.1 billion.

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Browse looks set for tolling breakthrough