BHP expects deal on Timor gas

BHP expects deal on Timor gas

MELBOURNE (Reuter): The Broken Hill Pty Co Ltd said yesterday it expects to reach a joint agreement on the design of the Bayu- Undan gas-condensate project in the Timor Sea between northwestern Australia and Indonesia this year.

"I think we can do it this year," Mike Baugh, general manager of petroleum in Australasia for BHP, told a media briefing.

BHP was earlier this month selected as the unit operator of the Bayu-Undan field which straddles two ZOCA (Zone of Cooperation Agreement) permits in the Timor Sea and two joint ventures.

BHP recently said both joint ventures had collectively studied various development concepts for the field, covering both liquids and gas production, notably a liquefied natural gas (LNG) production plant.

BHP holds a 42.417 percent stake of the ZOCA 91-12 Undan permit and has proposed building the LNG plant offshore using its own technology.

But Phillips Petroleum Co [P.N], which leads the ZOCA 91-13 Bayu consortium with a 60 percent stake, has proposed the production plant be built onshore.

The Bayu-Undan field was last estimated to have proven and probable reserves of 3.1 trillion cubic feet of gas and about 400 million barrels of liquids.

Development of the field has been estimated to cost up to A$4 billion.

The participants in ZOCA 91-12 besides BHP are Santos Ltd with 21.426 percent, Indonesia's Inpex Sahul with 21.209 percent and Petroz NL with 14.948 percent.

In the adjacent ZOCA 91-13 permit operated by Phillips, the other participants are Oryx Energy Co with 25 percent and Hardy Oil & Gas Plc with 15 percent.