North West Shelf Venture's LNG Expansion Running Below Capacity

By Angela Macdonald-Smith

Nov. 13 (Bloomberg) -- Australia's A$25 billion ($16 billion) North West Shelf venture is experiencing ``teething problems'' at its fifth liquefied natural gas production unit, which started up in August, said operator Woodside Petroleum Ltd.

Problems with the cryogenic heat exchanger mean the unit is taking longer than anticipated to ramp up to full production, Perth-based Woodside said today in a presentation to investors. The unit will run at 80-90 percent of capacity until it is shut down for maintenance in the second half of next year, it said.

The A$2.6 billion expansion of the North West Shelf venture plant in Western Australia, the nation's biggest LNG producer, boosted capacity for the fuel at the site in Karratha to 16.3 million metric tons a year. The venture sells LNG under long- term contracts to customers in Japan, South Korea and China.

The problem at the fifth unit ``will result in a reduced capacity until we get the problem fixed,'' Woodside Chief Executive Officer Don Voelte said in the presentation, which was webcast. The venture expects to produce about 250 LNG cargoes next year, Woodside said.

To contact the reporter on this story: Angela Macdonald-Smith in Sydney at amacdonaldsm@bloomberg.net