SYDNEY (AFX) - Woodside Petroleum Ltd chief executive Don Voelte said the oil and gas company expects to sell liquefied natural gas (LNG) from its Pluto project off Australia's north-west coast to north Asian and US west coast markets, adding changing market dynamics have also presented market opportunities in the Atlantic Basin.
"We believe we have identified the market not only for existing customers but new ones," Voelte said.
He was speaking at a briefing following Woodside's announcement early today that it is planning to develop its 100 pct owned Pluto project, at a cost of several billion dollars, to capture a global market opportunity between 2010 and 2012.
Voelte said Woodside, approximately one-third owned by Royal Dutch Shell, is not scheduling Pluto LNG for markets in China but said it has other projects which could service that market "if and when" Chinese companies have a requirement for Woodside gas.
He said Woodside has already been in talks with potential customers and has received strong interest from customers in Asia and North America, adding that the 100 pct ownership has commercial advantages.
"We're looking to work with our customers to meet their needs and also have flexibility for other markets," Voelte said.
He said there are potential new customers for the gas in the Atlantic market which 12 months ago Woodside would not have believed existed.
He added that European customers could not be ruled out.
Voelte said Woodside is also expanding its opportunities to get LNG into the West Coast US markets as well as Mexico.
The Pluto project is adjacent to the world-class North West Shelf Gas venture, one-sixth owned and operated by Woodside.
Voelte said Pluto has at least 3.5 trln cubic feet (tcf) of gas to support its development, saying that there is a level of comfort that there will be more gas to support the project.
Additionally, he said, the project's planned onshore gas processing plant offers the opportunity to commercialize other Woodside gas in the area.
He said the development of the Pluto LNG project will be at a pace not yet seen in the global gas industry, with an expected six years between the initial discovery and first shipments.
A final investment decision is planned for mid-2007, making it possible for LNG shipments to begin from late 2010.
Voelte said Pluto may be a "company changer" for Woodside, having more gas than Woodside's remaining equity share of reserves in the world-class North-West Shelf Gas venture.
"Woodside's equity share of processing capacity from Pluto is potentially more than double our equity share from North West Shelf," he said.
Woodside's one sixth share of the North-West Shelf project gives its 2.7 mln tons a year of LNG capacity compared with 5-7 mln tons from Pluto.
"We're on the cusp of doing something very special," Voelte said, adding that at this point Woodside plans to retain 100 pct of the project, which will include an onshore gas processing plant which may also be used to process gas reserves owned by other companies in the area.
He said the project will deliver gas ahead of the company's planned Browse Basin LNG project off the northern Australian coast, which is looking to deliver LNG from 2013 and its Sunrise joint venture project in the Timor Sea, which has an even longer development time frame.
Voelte said Woodside's North-West Shelf partners have been contacted, adding that he has personally reassured them his company wants to maintain its one-sixth interest in North-West Shelf and will do nothing to detract from safe reliable operations at North-West Shelf.
As well, he said, he has "no reason to believe Shell will not be supportive of the project even though to some degree it is a competitor "to the extent they have their own gas that they want to get into the market".
Meanwhile, Voelte refused to comment on speculation that China's CNOOC may launch a takeover offer for Woodside following its failed attempt to takeover US oil and gas group Unocal Corp.
"I don't speculate on market rumors," Voelte said.
Woodside's share price rose to a record of 32.03 aud today, following the project's announcement and also supported by record high oil prices.
At 3:00 pm in Sydney Woodside was trading up 1.58 aud or 5.26 pct at 31.97 while the S&P/ASX 200 was up 30.0 points or 0.69 pct at 4407.03.
(1 usd = 1.30 aud)
bruce.hextall@xfn.com
blh/gf/tr
For more information and to contact AFX: www.afxnews.com and www.afxpress.com
"We believe we have identified the market not only for existing customers but new ones," Voelte said.
He was speaking at a briefing following Woodside's announcement early today that it is planning to develop its 100 pct owned Pluto project, at a cost of several billion dollars, to capture a global market opportunity between 2010 and 2012.
Voelte said Woodside, approximately one-third owned by Royal Dutch Shell, is not scheduling Pluto LNG for markets in China but said it has other projects which could service that market "if and when" Chinese companies have a requirement for Woodside gas.
He said Woodside has already been in talks with potential customers and has received strong interest from customers in Asia and North America, adding that the 100 pct ownership has commercial advantages.
"We're looking to work with our customers to meet their needs and also have flexibility for other markets," Voelte said.
He said there are potential new customers for the gas in the Atlantic market which 12 months ago Woodside would not have believed existed.
He added that European customers could not be ruled out.
Voelte said Woodside is also expanding its opportunities to get LNG into the West Coast US markets as well as Mexico.
The Pluto project is adjacent to the world-class North West Shelf Gas venture, one-sixth owned and operated by Woodside.
Voelte said Pluto has at least 3.5 trln cubic feet (tcf) of gas to support its development, saying that there is a level of comfort that there will be more gas to support the project.
Additionally, he said, the project's planned onshore gas processing plant offers the opportunity to commercialize other Woodside gas in the area.
He said the development of the Pluto LNG project will be at a pace not yet seen in the global gas industry, with an expected six years between the initial discovery and first shipments.
A final investment decision is planned for mid-2007, making it possible for LNG shipments to begin from late 2010.
Voelte said Pluto may be a "company changer" for Woodside, having more gas than Woodside's remaining equity share of reserves in the world-class North-West Shelf Gas venture.
"Woodside's equity share of processing capacity from Pluto is potentially more than double our equity share from North West Shelf," he said.
Woodside's one sixth share of the North-West Shelf project gives its 2.7 mln tons a year of LNG capacity compared with 5-7 mln tons from Pluto.
"We're on the cusp of doing something very special," Voelte said, adding that at this point Woodside plans to retain 100 pct of the project, which will include an onshore gas processing plant which may also be used to process gas reserves owned by other companies in the area.
He said the project will deliver gas ahead of the company's planned Browse Basin LNG project off the northern Australian coast, which is looking to deliver LNG from 2013 and its Sunrise joint venture project in the Timor Sea, which has an even longer development time frame.
Voelte said Woodside's North-West Shelf partners have been contacted, adding that he has personally reassured them his company wants to maintain its one-sixth interest in North-West Shelf and will do nothing to detract from safe reliable operations at North-West Shelf.
As well, he said, he has "no reason to believe Shell will not be supportive of the project even though to some degree it is a competitor "to the extent they have their own gas that they want to get into the market".
Meanwhile, Voelte refused to comment on speculation that China's CNOOC may launch a takeover offer for Woodside following its failed attempt to takeover US oil and gas group Unocal Corp.
"I don't speculate on market rumors," Voelte said.
Woodside's share price rose to a record of 32.03 aud today, following the project's announcement and also supported by record high oil prices.
At 3:00 pm in Sydney Woodside was trading up 1.58 aud or 5.26 pct at 31.97 while the S&P/ASX 200 was up 30.0 points or 0.69 pct at 4407.03.
(1 usd = 1.30 aud)
bruce.hextall@xfn.com
blh/gf/tr
For more information and to contact AFX: www.afxnews.com and www.afxpress.com
© 2005 AFX News
