Woodside Energy has updated the cost estimate for the Browse LNG project in Western Australia, with capital expenditure rising to US$35.2 billion. The price jump is driven by inflation and the integration of a carbon capture and storage system designed to inject 4 million tons of CO2 annually.
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A 78 percent cost increase since 2019 is wild. Adding CCS helps the regulatory case, but it is clear that trying to bolt on decarbonization after the initial design usually leads to these kinds of budget blowouts.
The capex is one thing, but I wonder about the actual capture efficiency. They claim a 47 percent reduction in direct emissions, but that depends entirely on the reservoir performance. Does anyone know the specific injection pressure targets?
This is a classic example of using CCS as a tool for regulatory defensibility. Woodside is spending billions more just to get the project past the federal approval stage. It shows that the cost of carbon is now a primary driver of project finance, even if it is not a direct tax.
True, but the GDP and tax numbers from Deloitte are clearly meant to sway the government. A$56 billion in royalties is a huge carrot to keep the regulators from worrying too much about the biodiversity risks at Scott Reef.
