SUMITOMO EYES SECOND AUSSIE LNG PROJECT

Sumitomo Corp. will spend $20 million (Australian) to study feasibility of building Australia's second liquefied natural gas export project. The $2 billion (Australian) project near Darwin, N.T., would produce 2-4 million metric tons/year of LNG with Japan the likely target market and start-up planned for 1998. It would be fed by gas from Petrel and Tern fields in Bonaparte Gulf about 200 km west of Darwin. Plant site would be Middle Arm in Darwin Harbor 7 km from the city.

Sept. 24, 1990

2 min read

Sumitomo Corp. will spend $20 million (Australian) to study feasibility of building Australia's second liquefied natural gas export project.

The $2 billion (Australian) project near Darwin, N.T., would produce 2-4 million metric tons/year of LNG with Japan the likely target market and start-up planned for 1998. It would be fed by gas from Petrel and Tern fields in Bonaparte Gulf about 200 km west of Darwin. Plant site would be Middle Arm in Darwin Harbor 7 km from the city.

The project would generate about $740 million (Australian)/year during 20 years. Sumitomo expects to complete the study, an extension of its preliminary work the past 12 months, by June 1992.

VIABILITY QUESTIONED

There remain questions about the viability of the LNG project because the fields' operator, Santos Ltd., has not proven enough gas reserves to support the project.

Reserves are believed to be 2.5 tcf, about 40% of the volume required for the LNG project. Santos, with a 47% interest in the fields, became operator last December when it acquired the Australian assets of Ste. Nationale Elf Aquitaine.

Santos will not comment on Sumitomo's proposals, saying it still is studying options for developing the two fields. Sumitomo is expected to soon hold talks with Santos about the options and gas purchase price.