Bayu-Undan gas project price rises to $1.5b
Bayu-Undan gas project price rises to $1.5b
BRISBANE (Dow Jones): Petroz NL, an Australian oil and gas
company, said Monday that the total cost of the Bayu-Undan gas
liquids project in the Timor Sea is to rise to almost US$1.50
billion from US$1.46 billion.
The increased cost reflects design changes to the production
facilities to include equipment for a proposed second-stage
development to pipe natural gas to an onshore plant to be built
at Darwin in Australia's Northern Territory.
The rise in cost comes at a time when Petroz is struggling to
raise finance to fund its 8.3 percent stake in the project, now
amounting to US$123.3 million, up from US$120.5 million. The
company is actively seeking a suitor to help it with funding and
is also pursuing a possible rights issue.
U.S.-based Phillips Petroleum Co. is the operator of the Bayu-
Undan project, holding a 50.3 percent stake. The other
participants are Australia's Santos Ltd. with 11.8 percent,
Japan's Inpex with 11.7 percent, Kerr-McGee Corp. of the U.S.
with 11.2 percent and British-Borneo Oil & Gas PLC with 6.7
percent.
First production from the first stage Bayu-Undan development
is expected in the fourth quarter of 2003, with production
peaking in the first quarter of 2004 at 113,000 barrels a day of
gas condensate and liquefied petroleum gas.
The decision to install the additional equipment now increases
the likelihood of the second stage going ahead.
"On the basis of discussion with potential Australian domestic
(natural) gas customers, Petroz is confident that the sale of gas
from Bayu-Undan will commence coincident with the start of full-
scale liquids production in 2004," Petroz Managing Director Rod
Brown said in a statement.
Petroz said the additional equipment would allow the offshore
Bayu-Undan platform to produce natural gas for the proposed
pipeline at a rate of 750 million cubic feet a day, or the
equivalent of 290 petajoules of gas energy a year.
Phillips is believed to be in talks with rival Timor Sea
would-be gas producers Royal Dutch/Shell Group and Woodside
Petroleum Ltd. about possibly securing their cooperation on the
construction of the 500-kilometer long pipeline. Shell and
Woodside are partners in the Sunrise-Troubador-Evan Shoal gas
project in the Timor Sea.
Bayu-Undan contains an estimated recoverable reserve of 400
million barrels of condensate and LPG and 3.4 trillion cubic feet
of natural gas. The field is about 500 kilometers northwest of
Darwin, Australia, and 250 kilometers south of Suai, East Timor,
in the Timor Sea, in an area covered by the former Timor Gap
treaty between Australia and Indonesia.