Two of Australias largest known offshore gas fields, the North West Shelf and the neighbouring Gorgon field in Western Australia, are on a course to eventually merge, partners in the fields said on Thursday.
It will happen at some point, said Mike Baugh, president and group general manager, Australia and Asia, for the petroleum division of North West Shelf partner the Broken Hill Proprietary Co Ltd.
BHP holds a one-seventh stake in the North West Shelf which currently produces about seven million tonnes of liquefied natural gas (LNG) annually.
Discussions with the owner of the yet to be developed Gorgon field, the West Australian Petroleum Pvt Ltd (WAPET) consortium, were ongoing, Baugh said.
Joint development of the fields would provide added assurances to Japanese and other Asian customers that supplies of gas from Australia would continue well into the 21st century, Baugh said. Lee Entsminger, chairman and managing director of Mobil Exploration and Producing Australia, a West Australian Petroleum Pvt Ltd (WAPET) partner, also said he saw the development of Gorgon.
We see its time to move that project forward, Entsminger told an industry conference here on Thursday. Bruce Applebaum, president of the Texaco International.
Exploration division of Texaco Inc, another partner in Gorgon, said Gorgon would play an integral role in raising Texacos profile in liquefied natural gas.
Applebaum said he was encouraged by the inclusion of Mobil in the Gorgon project through Mobils acquisition of Ampolex Ltd bringing its international expertise to the project. Development of Gorgon would double Texacos worldwide reserve of gas. Gorgon has an estimated 33 trillion cubic feet of gas in reserves. Separate to Gorgon, the North West Shelf is in negotiations with Japanese utilities to double annual output to over 14 million tonnes to meet projected demand early into the 21st century. Baugh earlier on Thursday said those talks were in an advanced stage. Longer term, Japan is expected to require additional tonnages of LNG to keep pace with industrial growth.
In the year 2010 even with the possible extention of the existing contracts, which will expire sometime before the year 2010, there will be a gap of around six million tonnes of LNG, Takuki Murayama, director general of the Japan National Oil Corp told the conference. West Australian Petroleum Pvt Ltd (WAPET) is a joint venture of Texaco, Chevron Inc and Royal Dutch/Shell Group, each with two-seventh stakes, and Mobil Corp, with one-seventh.
Equal partners in the North West Shelf project are units of Broken Hill Proprietary Co Ltd, the British Petroleum Co Plc, Japan Australia LNG (MiMi) Pty Ltd, a partnership of Mitsui & Co Ltd and Mitsubishi Corp, Chevron Corp, Royal Dutch/Shell Group and Woodside Petroleum Ltd.
