North West Shelf LNG expansion proposed

Oct. 28, 1996

A proposed $5 billion (Australian) expansion of Australia's North West Shelf liquefied natural gas export project has taken another step forward. Chevron Corp. said North West Shelf partners submitted a proposal in Osaka to eight Japanese power and gas utilities that buy LNG from the project. Their proposal outlined a plan for a two-train LNG expansion-almost doubling the project's existing sales capacity of 7.5 million metric tons/ year-and follows indications of interest by Japanese

A proposed $5 billion (Australian) expansion of Australia's North West Shelf liquefied natural gas export project has taken another step forward.

Chevron Corp. said North West Shelf partners submitted a proposal in Osaka to eight Japanese power and gas utilities that buy LNG from the project.

Their proposal outlined a plan for a two-train LNG expansion-almost doubling the project's existing sales capacity of 7.5 million metric tons/ year-and follows indications of interest by Japanese customers to purchase additional LNG from the North West Shelf project (OGJ, July 29, p. 34).

Subject to customer requirements, the expansion could be on stream as early as 2003. The project would allow for growth in domestic gas sales and for the extension of existing contracts.

"Total cost of the expansion is expected to approximate $5 billion," Chevron said, including "new offshore production facilities and shipping."

Expansion prospects

Details regarding new production facilities, LNG plant expansion, and shipping plans were not disclosed by presstime.

However, North West Shelf project members have said they want to boost current LNG production capacity to 13.5-15 million tons/year from the current 7.5 million tons/year. An additional eight LNG carriers would be needed, as well. North West Shelf capacity has increased by 25% the last 6 years.

A unit of Royal Dutch/Shell Group this year proposed tying in development of giant Gorgon gas fields nearby in the Carnarvon basin to a North West Shelf expansion should markets materialize.

Offshore Northwest Australia and the Timor Sea region Australia shares with Indonesia have become E&D hot spots in recent years. Drilling activity is robust on the North West Shelf area, with three semisubmersibles, one jack up, and a drillship making hole at midsummer.

North West Shelf equal partners are Chevron Asiatic Ltd., BHP Petroleum (North West Shelf) Pty Ltd., BP Developments Australia Ltd., Japan Australia LNG (MIMI) Pty Ltd., Shell Development (Australia) Pty Ltd., and Woodside Petroleum Ltd.

North West Shelf partners sell almost all the project's LNG under a 20-year contract to eight utilities in Japan: Tokyo Electric Power Co. Inc., Chubu Electric Power Co. Inc., Kansai Electric Power Co. Inc., Chugoku Electric Power Co. Inc., Kyushu Electric Power Co. Inc., Tokyo Gas Co. Ltd., Osaka Gas Co. Ltd., and Toho Gas Co. Ltd.