Woodside Energy raises cost estimate for flagship Scarborough gas project (NYSE:WDS)

Woodside Energy (New York:WDS) early tuesday Raise the estimated cost Shell has announced an increase in its share of development costs for its Scarborough natural gas project by US$500 million to US$12.5 billion, taking the company’s share of development costs to US$8.2 billion, with the increase “largely driven by the maturity of the Pluto 1 train modification project scope”.

Woodside (WDS) also reported revenue of $3.03 billion for the quarter ended June 30, up slightly from $2.97 billion in the March quarter, largely due to the timing of LNG shipments from its Pluto facility, where nearly half of all LNG shipments were sold on the spot market in the quarter.

The company said it was on track to meet its full-year production guidance of 185-195 million barrels of oil equivalent, despite a slight decline in quarterly production to 44.4 million barrels of oil equivalent from 44.9 million barrels in the previous quarter, citing severe weather affecting the North West Shelf LNG facility and unplanned outages at the Wheatstone and Julimar projects.

Woodside’s (WDS) update comes a day after the company announced a $1.2 billion deal to buy Tellurian and the proposed Driftwood LNG development in the United States, as it bets on continued strong global demand for natural gas.

According to Dow Jones, analysts say the Tellurian acquisition is logical move For Woodside (WDS), adding another LNG project could offset natural declines in fields at existing operations, though some are skeptical it will achieve the internal rates of return it hopes for.