Regional LNG: BHP claims 18 big US buyers for its LNG: Report

BHP Billiton said 18 US large buyers had signed letters of interest in purchasing gas from its US$US600 million Cabrillo Port import terminal project, The Sydney Morning Herald reported.

No final agreements will be struck until the offshore terminal is approved by the US Coast Guard, the California State Lands Commission and the Governor, Arnold Schwarzenegger, which BHP believes could occur later this year.

The US Coast Guard "stopped the clock" on the approvals process last year, asking BHP to submit more information about the environmental impact of the project, which has faced fierce opposition from environmentalists.

A new draft environmental report is expected to be released on March 2.

Cabrillo Port will then undergo a 45-day public review process - including hearings in April - before authorities decide its fate.

Of the 18 potential buyers expressing interest in BHP's LNG, all names were kept confidential except for the Los Angeles Department of Water and Power.

But it is understood the letters of intent, if converted to contracts, would represent more than the terminal's LNG capacity when it opens as early as 2010.

Last week, Woodside announced it would develop a rival LNG import project in California, called OceanWay, which would reheat the gas on dedicated ships rather than using a floating terminal like Cabrillo Port.

Several other Californian import terminal projects have been proposed but none have yet been approved.

Woodside's North American LNG director, Jane Cutler, told the Herald last week that California was unlikely to approve more than two import terminals.

With billions of dollars in exports at stake, the Federal Treasurer, Peter Costello, was in Los Angeles last week lobbying Californians to consider importing Australian LNG.

"A number of proposals have been put forward for liquefied natural gas import terminals along the North American west coast, many of which have an Australian connection," Mr Costello said.

"With their long and successful track record in the LNG industry, Australian companies have the expertise to develop and operate these terminals, should these projects proceed."(*)