BHP pushes LNG deal

Allen Baker

BHP Billiton plans to get moving on developing a major field offshore Australia and a big LNG plant in the northwest even though 50-50 partner ExxonMobil doesn’t consider it a high priority. Phil Aiken, BHP’s group president for energy, told analysts in early December the Scarborough project offshore western Australia is expected to provide liquefied natural gas for the company’s proposed Cabrillo LNG terminal in California. A decision by regulators on the offshore terminal is expected by the middle of next year. The LNG plant would produce about 6 million tonnes annually from Scarborough, which lies about 175 miles off the Australian coast. It could also supply the building Chinese market.

Aiken didn’t mince words about ExxonMobil’s position, according to reports of the analyst meeting in the Australian press.

“They do not want to fast-track it. We do want to fast-track it and therefore we are going ahead,” Aiken was quoted as saying. “If they eventually want to get out of Scarborough, I’m sure there are plenty of companies that would want to take their place.”

ExxonMobil didn’t respond to Aiken’s comments.

BHP is still just working on a prefeasibility study for the LNG terminal, with construction to begin no earlier than 2006 if the company decides to go ahead. The plant would be at Pilbara, about 3 miles southwest of Onslow in northwestern Australia.

ExxonMobil is operator of Scarborough, which has proven and probable reserves of 8 trillion cubic feet of gas, with little in the way of associated liquids.