Woodside signs Pluto LNG sales agreement

Shares in Woodside have shot up 98 cents on the back of the company signing an agreement with The Kansai Electric Power Co. for up to 2 million tonnes of LNG a year over 15 years from its Pluto gas field.

At market close, Woodside's share price had risen by 2.33 per cent to close at $43.

The agreement covers supply from the end of 2010, on an ex-ship basis, with an option to extend supply by five years. The heads of agreement provides for Kansai Electric to purchase a 5 per cent equity interest in the Pluto development.

An LNG sales and purchase agreement is expected to be negotiated by the end of 2006 and will be conditional on a final investment decision by Woodside, which is due in the second quarter of 2007.

The President of Kansai Electric, Shosuke Mori, and Woodside's Chief Executive Officer, Don Voelte, signed the agreement in Perth today.

This is the second sales agreement for Pluto in the past four months.
Mr Voelte said Woodside was delighted to welcome Kansai Electric as a foundation customer for Pluto.

"As one of Japan's major electricity suppliers, Kansai Electric is an ideal customer," Mr Voelte said.

"Woodside and Kansai Electric have enjoyed a long and beneficial relationship through the North West Shelf Venture and we look forward to furthering this relationship through Pluto."

Kansai Electric is one of the largest electric power companies in Japan, with 2005 operating revenue exceeding US$22 billion. Kansai Electric has more than 35,000 megawatts of electricity generating capacity, and more than 13 million residential, commercial and industrial customers.

The Pluto LNG development is based on the Pluto discovery, 190km north-west of Karratha in permit WA-350-P. The field was discovered in April 2005.

Below is an announcement from the State Government relating to the agreement:

Premier and State Development Minister Alan Carpenter said the Pluto project promised significant benefits for WA and the rest of the nation over the life of the project.

"Based on similar projects, Pluto is expected to generate more than $15billion in Gross State Product, more than 3,000 direct and indirect jobs, over $200million in State revenue and more than $2billion in Commonwealth revenue," he said.

Mr Carpenter said WA was experiencing a petroleum bonanza with the level of committed projects rising from $10billion to $27.2billion in two years.

"LNG is WA's second most valuable petroleum product after crude oil," Mr Carpenter said.

"The volume of LNG sales reached more than 11.2million tonnes in 2005 compared with 8.7million tonnes in 2004.

"WA's LNG sector is powering along and the State continues to be one of the world's most reliable suppliers of LNG.

"Woodside itself has safely delivered more than 2,000 LNG cargoes from the North West Shelf Venture over more than 17 years, helping to cement WA's reputation as a reliable LNG supplier."