Regional LNG: BHP Billiton to push for Australian LNG plant

Australian mining group BHP Billiton said it wanted to steam ahead with plans for a multi-billion liquefied natural gas (LNG) plant in Western Australia even though it did not have the support of partner Exxon Mobil Corp, Reuters reported.

BHP, the world's biggest diversified mining company, unveiled plans for the LNG plant in September, saying it would use gas from the offshore Scarborough field which is operated by U.S.-based Exxon Mobil.

"For Exxon, Scarborough is not a priority. We see it as a priority. They do not want to fast track it, we want to fast track it," BHP Billiton Energy Group President Philip Aiken said at a briefing on Friday.

"If they eventually want to get out of Scarborough I'm sure there are plenty of companies that would want to take their place," he added.

BHP is seeking to supply Asia and the U.S. west coast via its proposed Cabrillo Port project off the coast of southern California.

Aiken said he believed there was a 50:50 chance Cabrillo would be approved but said BHP would continue to push ahead with developing Scarborough even if that project did not come off.

A decision on the California project is not expected until mid-2005.

The Scarborough field is jointly owned by Exxon and BHP Billiton. The resource is estimated to have proven and probable reserves of 8 trillion cubic feet of gas, slightly more than the 7.6 trillion cubic feet in the A$6.6 billion Greater Sunrise development in the Timor Sea.

Australia -- with an estimated 150 trillion cubic feet of proven and probable gas reserves -- is eager to get a foothold on the U.S. west coast, where scores of LNG import terminals have been proposed.

BHP plans to build the LNG plant at Pilbara, around 4.5 km (2.8 miles) southwest of Onslow in northwest Australia.

It is examining a number of concepts for field development that would connect a single train with a capacity of about 6 million tons per annum.

BHP has said the pre-feasibility study on the project was due to be completed by the first quarter of 2005 and, if the project was sanctioned, construction could begin in early 2006.

LNG is natural gas compressed until it liquefies for easier transport. It is sent in special ships to markets were it can supplement or replace gas brought via pipelines.

A spokesman for Exxon Mobil was not immediately available for comment. (*)