BHP, Timor partner lock horns over Timor project
BHP, Timor partner lock horns over Timor project
SYDNEY, Australia (AP): A rift between BHP and U.S.-based
Phillips Petroleum is delaying their joint development of the
massive Bayu-Undan gas fields in the Timor Sea off Darwin.
The US$2.22 billion-plus (above A$3 billion) Liquefied Natural
Gas (LNG) project now appears to be drifting as BHP Petroleum and
Phillips each remain convinced of their own development options
for the project.
BHP wants to test its unique offshore production technology
while Phillips remains fixed on its plan for a massive onshore
project near Darwin.
Phillips also noted it has now opened discussions with
Woodside Petroleum and Shell over a possible joint LNG
development at Darwin.
Woodside and Shell stole the march on the Bayu-Undan
participants earlier this year when they announced a feasibility
study into a $7.4 billion (A$10 billion) onshore LNG project at
Darwin to develop their own gas fields in the Timor Sea.
Woodside and Shell announced at the time that they would speak
to all Timor Sea participants in the Timor to gauge the potential
for future joint developments.
BHP and Phillips are the major players in a nine-member
consortium proposing to develop the Bayu-Undan fields.
While the first phase of the project has been approved -- the
production of liquids from the field is expected to start next
year -- the larger LNG development remains stalled.
"Clearly frustration is building among the joint venturers
about the lack of agreement," said Peter Best, energy analyst
with Macquarie Equities.
Approval of either onshore or offshore development had
originally been expected months ago but Phillips said there is
now no deadline for final agreement on talks.
"I think there is concern among all the joint venture partners
that the longer we take to make a decision the further behind
Bayu-Undan gets," said Jim Godlove, Darwin area manager for
Phillips.
Godlove said Phillips favors a single LNG production site in
joint venture with Shell and Woodside with a capacity of up to 9
million metric tons of LNG per annum, compared with a 3 million
ton-a-year plant originally envisaged for the Bayu-Undan project.
"We will hopefully work with them to develop a single
location," he said.
He said individual discussions with Shell and Woodside had
started about a month ago and were continuing.
A spokesman for BHP said the company was hopeful that a
development proposal would be accepted before the end of the
year.