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Phillips boosts local commitment

PHILLIPS Petroleum’s consolidation of its Perth staff into a new West Perth building at the end of the year highlights Perth’s attraction as a major Australian oil and gas service centre.

Bayu Undan in the Timor Sea is Phillips’ flagship Southern Hemisphere development project, and the company spudded its first development well there last week, ahead of full commercial gas liquids production in 2004.

Offshore facilities have been designed to process 1.1 billion cubic feet of gas per day from the field, which has an estimated life of 25 years.

Phillips has also secured a supply contract with a 2006 delivery date from the second phase of the project, which involves bringing natural gas to a proposed Darwin processing plant.

The company’s other major involvement in the region is as a 30 per cent partner in the Greater Sunrise project, also north west of Darwin.

However, the Oklahama-based company has voted for Perth rather than Darwin as its long-term Australian headquarters.

Phillips, which has staff in three buildings in Perth and West Perth, will lease its new five-level Ord Street headquarters from Colonial First State Property Limited.

But plans to lease an adjoining lot, approved for a three-storey office development, for 12 years, have prompted speculation Phillips intends to more than double the number of employees and associates working out of Phillips Oil House.

While not willing to comment on plans for the building, a company representative said the Ord Street property would accommodate both Phillips’ current staff numbers plus those expected as the company grows its presence in Australia.

Phillips has held out on Shell’s plans for floating liquefied natural gas production from Sunrise, as opposed to initial understandings to bring this gas to shore in Darwin also.

However, the company has confirmed it has no plans to walk away from the project, maintaining the situation will come to some resolution following comparable independent analysis of all options to develop the project in the most economic way.

The company also remained in con-tact with potential owners and operators of future pipelines in Australia, the spokesman said.

The company representative denied a battle with Shell for supremacy in the North American gas market was affecting Timor Sea plans.

“Neither of us has a captive market in the United States and we both have the ability to send our gas to markets everywhere,” he said.

Neither was Phillips jealous of Shell’s FLNG technology. Phillips was one of the leaders in terms of technology patents and was a renowned specialist in LNG plant technology.

“But we all wonder how something new will work and this (FLNG) carries a risk that needs mitigating, particularly with long-term contracts,” the spokesman said.

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