Perth-based Woodside Petroleum Ltd and US company Apache Corp are increasingly likely to strike a gas supply arrangement over the expansion of the Pluto gas project.
Perth-based Woodside Petroleum Ltd and US company Apache Corp are increasingly likely to strike a gas supply arrangement over the expansion of the Pluto gas project, according to analysts at UBS.
In a report, analysts said the lack of drilling success implies it is probable that both companies may strike the agreement next year over Apache's Julimar and Bulimar gas discoveries, located close to Pluto.
"Woodside's lack of success drilling in the Pluto area, and the fact no new exploration wells are planned in the area over 2H08 implies Woodside will have to arrange for third party gas supply for Pluto LNG T-2 [train 2]," analysts said in the report.
"In our view, this makes it increasingly probable that Woodside and Apache (the Julimar/Bulimar gas
discoveries are located close to Pluto) strike a gas supply arrangement in 2009 in order for Pluto LNG T-2 to go ahead."
Earlier this year, Woodside chief executive Don Voelte said the company was not panicking over the lack of exploration success at Pluto 2, saying Woodside would prefer to find the right type of gas rather than build a plant for the sake of it.
The company is targeting between now and 2010 final investment decisions on the expansion of Pluto and the development of the Browse and Sunrise assets.