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Woodside aims to seal LNG plant stake sale ahead of USD11-B gas project go-ahead

February 19/2021

MOSCOW (MRC) - Woodside Petroleum expects strong buyer interest in the sale of a share of a new production unit at its Pluto LNG plant, top executives said on Thursday, a precondition for a planned USD11 B expansion at its Scarborough gas and Pluto project, said Reuters.

The renewed push by Australia's biggest independent gas producer on the 8-MMtpy expansion project comes after last year's COVID-19 induced collapse in oil and gas prices drove its underlying annual profit down 58% to USD447 MM. The result was well short of analysts' forecasts, which sent its shares down as much as 3.7% after the result was released on Thursday.

Woodside is looking to sell a 50% stake in the new production unit, or train, at the Pluto LNG plant in Western Australia, which will be fed with gas from the Scarborough project. Selling a stake would be key to avoiding a capital raising or a credit downgrade.

The company suspended the sale process last year when oil prices slumped but is now optimistic about luring buyers. "We're now sitting in a much more attractive pricing environment," Chief Financial Officer Sherry Duhe told analysts.

"The buyer appetite for infrastructure assets just continues to grow. And so we do believe that there'll be strong interest in that asset," she said. Woodside's other growth project underway is the Sangomar oil development off Senegal, where its partner FAR Ltd has just received a tentative takeover offer from Russia's Lukoil.

Woodside last year pre-empted Lukoil from buying Cairn Energy's stake in Sangomar, as it was concerned the project could then fall foul of U.S. sanctions on Russia. However Chief Executive Peter Coleman said on Thursday there was no concern with Lukoil becoming a partner through a takeover of FAR, as FAR's stake in the Senegal project was below the 33% equity threshold for U.S. sanctions.

Woodside stuck to its forecast for fiscal 2021 output of 90-95 MMb of oil equivalent, lower than its production in 2020. On a statutory basis, Woodside posted an annual loss of USD4.03 B, its first loss in eighteen years, hit by USD4.37 B in asset write-downs it took at the half-year.

As per MRC, Wood has secured a contract valued at over USD120 million with Sinopec Hainan Refining and Chemical Limited Company (Sinopec) to provide engineering, procurement and construction (EPC) services to expand its refinery development in the Hainan Free Trade Zone (FTZ) in South China. Once completed, the ethylene renovation and expansion project will produce up to one million tonnes of ethylene derivatives and refined oil on an annual basis and is expected to boost economic growth in Chinas downstream sector by more than 100 billion yuan (USD14.1 billion). Output from the Hainan FTZ will serve ethylene demand across China and globally.

Ethylene and propylene are feedstocks for producing polyethylene (PE) and polypropylene (PP).

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 2,220,640 tonnes in 2020, up by 2% year on year. Only shipments of low density polyethylene (LDPE) and high density polyethylene (HDPE) increased. At the same time, polypropylene (PP) shipments to the Russian market reached 1 240,000 tonnes in 2020 (calculated using the formula: production, minus exports, plus imports, excluding producers' inventories as of 1 January, 2020). Supply of exclusively PP random copolymer increased.


mrcplast.com
Author:Anna Larionova
Tags:petroleum products, PP, PE, neftegaz, petrochemistry, Sinopec, Lukoil.
Category:General News
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