Confident Woodside goes all-in on $8 billion Scarborough FEED

June 3, 2019
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Woodside Petroleum has made the decision to proceed into front-end engineering and design (FEED) on a 100 percent basis in its US$8bn Scarborough offshore gas development.

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Scarborough gas field is located approximately 270km north-west of Onslow in the Carnarvon Basin in the Northwestern Shelf, offshore Western Australia. The field lies in the WA-1-R license in water depths of 900m to 1,500m. The WA-1-R license was previously owned by ExxonMobil subsidiary Esso Australia Resources (50%), BHP Billiton (25%) and Woodside Petroleum (25%).

 In March 2018 Woodside finalised the acquisition of ExxonMobil’s 50 percent interest in the Scarborough project and began FEED work earlier this year by awarding a total of four separate work scope contracts. 

The contracts were awarded to McDermott, a pairing of OneSubsea and Subsea 7, IntecSea and Saipem. 

The semi-submersible production contract was awarded to McDermott and subsea work including subsea umbilical risers and flow lines contract was awarded to OneSubsea and Subsea 7.

The contract for export trunkline engineering went to IntecSea, while Saipem was awarded the deal for the trunkline support services, with the option to carry out line pipe coating and installation.

Eat of the four FEED contracts has the option to progress into the engineering, procurement, construction and installation phase (EPCI) phase. 

The contracting strategy adopted by Woodside for the Scarborough project has been somewhat unusual, especially in Australia. With no expression of interest or pre-qualifying round, Woodside handpicked two bidders to compete for each of the four packages. In addition, Woodside awarded and fully funded the contracts without the support of its joint venture partner BHP (25% interest). 

 BHP has so far been quiet regarding its plans for the Scarborough project. In a recent presentation, BHP referred to Scarborough as “low risk” but “low return”. BHP also revealed Scarborough is less than five years away from a potential start-up. The project will be a US$2bn investment net from BHP. 

 Final investment decision (FID) is scheduled for next year for Scarborough. 

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