Australian LNG player Woodside said its production of the chilled fuel reached a record high in 2016 rising 6 percent from the year before.
Woodside’s 2016 LNG production hit 63.7 MMboe (million barrels of oil equivalent), the company said in its full-year report on Thursday.
Production of LNG is expected to rise to 63–66 MMboe in 2017, helped by the anticipated start-up of Chevron’s $US34 billion Wheatstone LNG project in Western Australia.
Woodside said it expected an increase in LNG contract prices in the first three months of this year due to “the strengthening oil price and lag in oil-linked pricing formulas for existing LNG contracts.”
Woodside CEO Peter Coleman said the company begins 2017 in a strong position.
“Our business margins have improved through 2016 and our 2017 budget is free cash flow neutral at US$35 per barrel.”
According to Coleman, the company’s production performance was “outstanding.”
“LNG production system reliability has now exceeded ninety-nine per cent for a second consecutive quarter,” Coleman said
“The Wheatstone project is approaching LNG Train 1 construction completion, all modules are on-site and final hook-up and commissioning has commenced. We look forward to adding production from Wheatstone in the middle of this year.”
Wheatstone is a key component of Woodside’s near-term growth strategy and would contribute more than 13 MMboe of annual production once both trains are fully operational, Coleman said.
Woodside noted in the report that five uncommitted 2017 LNG cargoes were contracted under a mid-term sales agreement during the fourth quarter of 2016.
According to the company, negotiations for a further 13 cargoes in 2017-18 are currently underway.
LNG World News Staff