The Pluto LNG project in Western Australia has experienced significant delays and cost overruns. The project was initially expected to cost £8 billion and start production in 2012, but costs have risen to almost £10 billion and the start date is now 15 months delayed. Reasons for the delays include bad weather, mechanical faults during installation, design flaws, and onshore commissioning errors. The project aims to provide a reliable energy source for Asia-Pacific customers and boost the Western Australian economy by £19 billion over 25 years of operation.

1. Davood Nattaghi
March 2012

2. Agenda
Introduction
Overview
Objectives and Aims
Time Schedule
Facts
Reasons for Delay
Bibliography & References
Appendix

3. Project Introduction
Operator: Woodside Petroleum Ltd
Location: North West Shelf of Western Australia
Timeframe: 25 year lifespan, expected to start
production during first half of calendar year 2012
Initial Estimated Cost: £ 8 billion
Reserves: about 5 trillion cubic feet of natural gas
Supply volume: 4.3 million tons natural gas per
year

4. Project Overview
LNG Plant
Platform & Topsides Facility
Pipeline / Mono Ethyl Glycol (MEG) Line
Subsea Production Wells
Flow lines and Risers

5. Project Overview
The project is a joint venture between Woodside the operator, Tokyo Gas
and Kansai Electric, who became project partners in January 2008
Project is underpinned by 15-year sales agreements with Kansai Electric
and Tokyo Gas
Interest Proportion
5%
5%
Woodside
Tokyo Gas
90%
Kansai Electric

6. Project Aims
Provide a reliable source of clean energy to Woodside’s customers in the Asiapacific region
Boost the West Australian economy by at least £19 billion over its lifetime
Create up to 6,000 jobs
Maximising opportunity for Australian suppliers and contractors
Protection of the environment

7. Project Initial Schedule

8. Project Facts
Pluto project is now 15 months behind original schedule
Project costs rose from £ 8 billion to almost £ 10 billion
Woodside Petroleum’s full year profits fell by 4.3 percent

9. Reasons for Delay
Bad weather and heavy rain
Mechanical faults experienced with installation
Design faults
Onshore commissioning errors
Project complexity and labour issues

10. Bibliography & References
Bendeich, M. (2011) Reuters, 17 June, [Online], Available:
http://www.reuters.com/article/2011/06/17/woodside-lng-pluto-idUSL3E7HH03A20110617 [3 March 2012].
Booz, A. (2006) 'Capital project Ececution in the oil and gas industry '.
Kobelke, D. (2006) 'Pluto LNG Development Industry Briefing', November.
Ltd, T.G.C. (2007) 'Contract Conclusion of the Pluto LNG Project', August.
Ltd, W.E. (2009) 'Pluto powers ahead', Pluto Pulse, October.
News.au (2011) News., 17 June, [Online], Available: http://www.news.com.au/business/breakingnews/woodside-petroleum-delays-western-australian-pluto-lng-project-again [5 March 2012].
offshore-technology (2011), April , [Online], Available: http://www.offshore-technology.com [6 March 2012].
Ordons News (2011), 18 June, [Online], Available: http://www.ordons.com/oceania/australasia/27096woodside-petroleum-blames-western-australian-pluto-lng-project-delay-on-poor-weather.html [4 March
2012].
Thewest (2012), 22 February , [Online], Available: http://au.news.yahoo.com/thewest/business/a//news/12978404/pluto-delays-hit-woodsides-profit/ [6 March 2012].

11. Bibliography & References
Wilkinson, R. (2011) Oil & Gas Journal, 24 June, [Online], Available:
http://www.ogj.com/articles/2011/06/woodside-again-delays.html [4 March 2012].
Woodside (2011), [Online], Available: http://www.woodside.com.au [6 March 2012].
Young, E.&. (2011) 'Capital project life cycle management for oil and gas'.
ABC, News (2010) Youtube , 30 November , [Online], Available:
http://www.youtube.com/watch?v=mHIIQZXutHw [7 March 2012].

12. Thank you for your attention

13. Appendix