Regional LNG: NWS LNG expansion decision in 2005

Diversified miner BHP Billiton on Tuesday confirmed that the decision to further expand the North West Shelf liquefied natural gas (LNG) joint venture would likely be made in the middle of next year, Asiapulse reported..

Joint venture operator Woodside Petroleum had previously announced the decision on a A$1.6 billion (US$1.1 billion) fifth LNG processing train was expected by early 2005 at least.

The North West Shelf, located off the northern coast of Western Australia, currently has three trains at full production and a fourth expected to reach full capacity by mid-next year.

Speaking at a media briefing at the World Energy Congress in Sydney, BHP Billiton energy president Phil Aiken said the joint venture partners were in the process of going through a pricing review of existing LNG contracts with Japanese buyers, which was just about completed.

Aiken said once the price review was completed BHP Billiton hoped to start "meaningful discussions" about the extension of those contracts post 2009.

"When there is some idea about how (those contracts) are going, and with the fact that we are going to supply China in 2006... we intend to make a decision on train five," he said.

"But I think that this unlikely to be made until the first half of next year."

Woodside Petroleum had previously said the five joint venture partners were committed to train five but were yet to formally sign off on the deal.

The proposed fifth train could have a capacity of about 4.1 million tonnes of LNG a year and would raise the North West Shelf project's annual capacity to about 16 million tonnes.

The partners in the North West Shelf Venture also include BP Developments Australia Pty Ltd, ChevronTexaco Australia Pty Ltd, Japan Australia LNG (MIMI) Pty Ltd, and Shell Development (Australia) Pty Ltd. (*)