Regional LNG: Woodside to start on Browse Basin LNG project
Monday, May 16 2005 - 01:16 AM WIB
Booming demand from Asia for LNG, including the recent emergence of India as a potential major customer, means Woodside believes Browse Basin's time has arrived.
The big but undeveloped gas fields (Brecknock, Brecknock South and Scott Reef) have been waiting since their discovery in the 1970s for the right development conditions to emerge.
A commitment has now been made to drill three appraisal wells, with the first two to start late next month on the Brecknock gas field, one of a cluster of gas fields some 400 kilometres north-west of Broome that underpins the project.
A third well on the Brecknock South gas field will follow in August, with the program aimed at confirming the Browse project's underpinning gas resource, which stands at more than 20 trillion cubic feet of gas.
The work program is aimed at ensuring that the project can move into a front-end engineering and design stage in 2007-08 ahead of first production by 2011-12.
Woodside has close to a 50 per cent interest in the Browse project and is the operator. Other partners are BP, ChevronTexaco, Shell (Woodside's 34 per cent shareholder) and BHP Billiton.
Early indications are that the Browse project will involve two processing trains, each with an annual capacity of 7 million tonnes.
That compares with the 15.9 million-tonne-a-year capacity from the existing North-West Shelf gas project once the planned addition of a fifth processing train is complete.
The go-ahead for the $1.6 billion Train 5 expansion is expected by the end of June, even if contracts for the additional supply are not in place.
China has given the Browse project encouragement in private talks, and the country has recently talked of aggressive expansion plans for the first of its LNG receiving terminals.
ExxonMobil recently forecast that global LNG production would rocket from 150 million tonnes a year to 450 million tonnes a year by 2020 to meet demand, with growth in total energy consumption forecast to climb by 50 per cent by 2030, with countries such as China and India leading the charge.
Because of competition from Middle East projects, India has not previously been on the radar for Australian LNG.
But the country has recently indicated that Australia could play a part in an expected 25 million-tonne-a-year requirement by 2012, dovetailing with the plans for the Browse project.
Meanwhile, Australia and East Timor reached an agreement on Friday for the sharing of revenue from the stalled Sunrise gas project in the Timor Sea, also operated by Woodside.
Impoverished East Timor would now get a 50 per cent share, up from 18 per cent, in return for putting the dispute on the maritime boundary between the two countries on ice for 50 years. (*)