http://www.theaustralian.com.au/business/woodside-puts-pluto-on-r...

http://www.theaustralian.com.au/business/woodside-puts-pluto-on-review/story-e6frg8zx-1225942435438

Woodside Petroleum puts $12bn Pluto gas project cost on review
Matt Chambers From: The Australian October 23, 2010 12:00AM

WOODSIDE Petroleum is reviewing costs and timing of the $12 billion Pluto liquefied natural gas project in Western Australia.

The company has had to start dismantling parts of its 130m-high flare tower at Pluto because it has not been built to withstand very high winds.

The review has led analysts to boost cost estimates and delay first production forecasts on the project, which is targeting first LNG production from a plant on the Burrup Peninsula in March next year.

In its third-quarter production report yesterday, Woodside said Pluto was 94 per cent complete at the end of last month.

"A comprehensive periodic cost and schedule evaluation is under way; the results will be available in November," the Perth-based oil and gas producer said.

A spokesman said that it was too early to say whether delays or cost overruns were on the cards.

Further worrying analysts, Woodside announced another dry hole, the Camus-1, in its 20-well exploration program, which it has described as the nation's biggest.

Woodside hopes to expand Pluto by adding second and third production trains.

The firm said the flare tower designs were not in compliance with its wind load specifications.

"Some sections of the flare towers are being dismantled in preparation for the approaching cyclone season and corrective action," it said.

Contractor Foster Wheeler/Worley Parsons was managing the flare towers through a flare design and fabrication specialist, Woodside said.

Deutsche Bank analyst John Hirjee delayed his estimate for first LNG from Pluto until July and boosted his development cost estimate by $200m.