Woodside Pete plans to deliver LNG to California
Wed Jan 18, 2006 03:58 PM ET
yahoo.reuters.com
SAN FRANCISCO, Jan 18 (Reuters) - Woodside Petroleum Ltd. (WPL.AX: Quote, Profile, Research) said on Wednesday it plans to seek approval to deliver liquefied natural gas to California from Australia.
The Australian oil and gas producer would join other competitors targeting California's big appetite for natural gas for its power plants and other uses.
Woodside said it could supply about 10 percent to 15 percent of the state's gas supply which now comes mostly from Canada, the U.S. Southwest, and Rocky Mountain area.
The Australian oil and gas producer said it plans to deliver the LNG via tankers to a site at least 15 miles offshore Southern California, where it would be turned back to gas aboard the tankers and then delivered to shore through a pipeline on the seabed. The company said it is exploring possible locations for the delivery.
Jane Cutler, president of subsidiary Woodside Natural Gas, told a news conference in Sacramento that the company expects to announce a delivery point in February.
Another Australian company, BHP Billiton (BHP.AX: Quote, Profile, Research) (BLT.L: Quote, Profile, Research) , has proposed building an LNG terminal at Cabrillo Point in southern California, and an LNG terminal is planned at the port of Long Beach in southern California. Other gas projects off the California coast also are in the works.
San Diego-based Sempra Energy (SRE.N: Quote, Profile, Research) is currently building LNG terminals at Mexico's Baja California and at Cameron, Louisiana.
Cutler declined to discuss costs for the proposed project but said the price tag for the delivery system "is hundreds of millions of dollars."
Tankers arriving offshore Southern California would dock at a submerged buoy connected to a flexible pipe that would deliver gas to the seabed pipeline. The line would connect to the onshore pipeline system carrying gas to customers.
New tankers would have to be developed to convert LNG back to gas.
Woodside chief executive Don Voelte tried to offset any safety concerns about the gas, saying the company has delivered LNG for 17 years to Japan, South Korea, Turkey, Spain and U.S. East and Gulf coast ports without a hitch.
Cutler estimated deliveries of LNG at 700 million cubic feet a day, with a total capacity of 1.4 billion cubic feet a day if Woodside goes ahead.
The gas would come from Woodside's yet-to-be-developed Pluto and Browse fields off Western Australia. The company also operates Australia's North West Shelf joint venture, the company's biggest resource development and only LNG producer.
Woodside will seek approvals for the project from federal, state and local agencies, including the U.S. Coast Guard, the California State Lands Commission, and the California Coastal Commission.
Cutler estimated it would take a couple of years to go through the permitting process.
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