Phillips Petroleum Co. said March 8 that it is stepping up efforts to bring Timor Sea gas to market and has signed a letter of intent with El Paso Corp. for a major liquefied natural gas project to deliver some 4.8 million tons a year of LNG to Southern California and Baja.
Subsidiaries of the two companies have signed a letter of intent for the long-term purchase by El Paso of LNG from a plant to be built by Phillips near Darwin, Australia, with a definitive agreement expected by mid-year for sales beginning in 2005.
Phillips said the LNG would be re-gasified in North America and sold as approximately 680 million cubic feet per day of natural gas for electric power and commercial and industrial development in Mexico's Baja California peninsula. The LNG would also provide a new source of natural gas supplies for Southern California markets.
El Paso would be responsible for marketing the natural gas.
Phillips said it is working jointly with El Paso to develop LNG shipping and a new LNG receiving terminal on the West Coast. The companies are working with Mexican and U.S. authorities to establish the site of the new terminal and acquire regulatory permits. The new terminal would begin providing service in 2005. The companies would use existing pipelines.
Phillips said the Darwin LNG facility would be built using Phillips' Optimized Cascade LNG Process and will be supplied with gas from the Greater Sunrise fields in the Timor Sea. These fields contain gas reserves of approximately 9 trillion cubic feet.
Bill Parker, Phillips executive vice president, worldwide production and operations said that with future gas sales to this LNG project and to domestic customers in Australia's Northern Territory, "the Timor Sea will become a new center of production for Phillips, commercializing significant quantities of gas and condensate reserves."
Phillips' Optimized Cascade LNG Process is used at a company-operated LNG plant in Kenai. In addition, Phillips has interests in LNG shipping and licenses its proprietary LNG manufacturing technology to other users worldwide.