Oil and gas producer Woodside Petroleum Ltd has been busy this week, playing down speculation that Taiwan could be a market for its Browse project as it moved ahead with construction contracts connected to its massive Pluto field.
Oil and gas producer Woodside Petroleum Ltd has been busy this week, playing down speculation that Taiwan could be a market for its Browse project as it moved ahead with construction contracts connected to its massive Pluto field.
Woodside confirmed it has held talks to sell gas to CPC Corp of Taiwan.
Woodside said that the company was in “discussions with potential Asian buyers about significant volumes of liquefied natural gas and that a key terms agreement may soon be signed”.
Meanwhile, the $12 billion Pluto project is moving ahead, with Woodside awarding a construction and project management contract for its Gap Ridge construction camp in Karratha to the Ngarda Alliance, comprising Ngarda Civil and Mining and Leighton Contractors.
This past week has also been a busy one for the indigenous Ngarda group, which plans to double its workforce in the next six months after a $300 million five-year deal with BHP Billiton Ltd to manage its Yarrie iron ore mine.
Regarding the speculation that CPC Corp could be a gas buyer, a Woodside spokesperson declined to confirm the talks centred around Browse, but market speculation suggests the project is the likely source.
Browse is located about 425 kilometres north north-west of Broome and contains an estimated 20 trillion cubic feet of gas and 300 million barrels of condensate.
Woodside signed up the venture’s first customer last week, finalising a deal to supply between two and three million tonnes of LNG a year to PetroChina.
The supply agreement is for a period of 15 to 20 years, starting in 2013 to 2015, and is expected to bring revenue of $35 billion to $45 billion into Australia.
While the financial details remain confidential, brokerage UBS estimates PetroChina may have agreed to pay $US7 to $US9 per million British thermal units for the gas, valuing the deal at about $45 billion.
Woodside has indicated Browse has the capacity to produce up to 14 million tonnes of LNG annually.
Woodside managing director and chief executive Don Voelte was bullish on the outlook for LNG when delivering the company’s half year results in August.
“The people that are acquiring LNG around the world, especially in the Asia-Pacific, are growing,” Mr Voelte said.
“There is a recognition of what LNG is worth and we’re seeing that show up in sales negotiations.”
The Browse project is 47 per cent owned by Woodside, with BP, BHP Billiton Ltd, Chevron and Royal Dutch Shell holding various stakes in the venture.
Woodside, which recently gave the green light for its Pluto LNG development in WA, is increasingly focusing its attention on the LNG market.
Along with Browse and Pluto, Woodside has a stake in the undeveloped Sunrise project in the Timor Sea and the company is the operator of the North West Shelf Venture in WA.
