A few years ago a $5 billion resources project would have been big deal.
Now its all a bit ‘ho hum’ it seems, judging by the reaction to the news yesterday that participants in the North West Shelf oil and gas venture had approved $US5 billion ($5.5 billion) worth of spending that will keep the shelf operating and supplying its onshore gas commitments past 2013.
It is in effect a makeover for the project, which was the first major LNG project in Australia and has paved the way for a growing number of other projects in Western Australia, and in central Queensland where they will be using coal seam methane gas.
Woodside and BHP Billiton will both contribute $US850 ($920 million) million each to the cost, as will the other participants, except the China National Oil Co, which is not a member of the infrastructure consortium for the Shelf.
The new Rankin 2 project is due to start in 2013 and would recover remaining low-pressure gas from the North Rankin and Perseus gas fields.
North Rankin B will extend the life of the project, which began operating in 1986, at least until 2041. By the end of this year the Shelf venturers plan to have a fifth LNG processing train commissioned, lifting annual output from around 11 million tonnes to 16 million tonnes.
Woodside Petroleum, operator of the North West Shelf Venture, says the North Rankin 2 project will include the installation of a second platform to recover remaining low pressure gas from the North Rankin and Perseus gas fields off the Western Australian coast.
"This project will extend the field life of the North Rankin and Perseus fields and will support the venture’s onshore gas commitments to supply customers post 2013," Woodside chief executive Don Voelte said in a statement to the ASX.
North Rankin is located in 125 metres of water about 135 kilometres off Karratha.
Woodside is the operator of the venture, which has five other participants – BHP Billiton Ltd, BP Developments Australia Pty Ltd, Chevron Australia Pty Ltd, Japan Australia LNG (MIMI) Pty Ltd, and Shell Development (Australia) Pty Ltd.
BHP Billiton petroleum chief executive Michael Yeager said in a separate statement that North Rankin 2 would deliver gas from the North West Shelf for another 25 years.
"This extension of the North West Shelf project follows our approval of the fifth LNG (liquefied natural gas) train which significantly expanded the LNG facility as well as the Angel gas and condensate field which are under development," he said in a statement.
The fifth train will add a further 4.4 million tonnes of production capacity and increase total annual output to 16.3 million tonnes.
The North Rankin B (NRB), platform is to be constructed adjacent to the existing North Rankin A platform, which will itself require significant brownfield work including the installation of new equipment. The two platforms will be connected by a 100-metre bridge and operate as a single facility.
The new platform will be a major offshore facility with a topsides weight of about 23,600 tonnes. NRB is expected to start-up in 2012, with steady state production scheduled for early 2013.
The six equal participants in the North West Shelf project are: Woodside Energy Ltd. (16.67% and operator); BHP Billiton Petroleum (North West Shelf) Pty Ltd 16.67%t; BP Developments Australia Pty Ltd (16.67%); Chevron Australia Pty Ltd (16.67%); Japan Australia LNG (MIMI) Pty Ltd (16.67%); and Shell Development (Australia) Pty Ltd (16.67%). CNOOC NWS Private Limited is also a member of the North West Shelf Venture but does not have an interest in North West Shelf Venture infrastructure.
Woodside shares rose $1 to $54.50 while BHP shares fell 24c to $35.81.
