Rick Wilkinson
OGJ Correspondent
MELBOURNE, Jan. 16 -- Woodside Petroleum Ltd., Perth, has suspended its proposed OceanWay LNG import terminal off the Californian coast near Los Angeles just over a month after saying it was continuing the project, but at reduced size.
Woodside still believes in the long-term value of LNG as a source of clean, reliable energy for Los Angeles, according to Steve Larson, Woodside natural gas president. However, Larson said the impact of the current market conditions had led to a withdrawal of the application to Californian authorities "for the time being." The decision was taken in the face of rising US domestic gas production and lower gas prices.
The regulatory authorities have been notified.
In December 2008 Woodside reduced the number of regasification tankers for the project from two to one citing community and regulatory concerns as well as a perceived fall in customer demand.
The plan involved bringing LNG from Woodside's Australian gas projects, converting the LNG back to natural gas in regasification tankers and unloading the gas through underwater buoys 45 km off Los Angeles. The gas was to be piped into the southern Californian network via a hub at Los Angeles International Airport.
Larson said the permitting process in California was challenging, but Woodside had ben confident that its design was safe and environmentally sound and would ultimately have succeeded.
Australian analysts say withdrawal from the project is not particularly significant for Woodside and is unlikely to have much impact on the company's share valuation or its planned workload in Australia.
