LNG (LIQUIFIED NATURAL GAS)

Scarborough, Brecknock and Tiof considered for development

It looks to be a good time to invest in pipeline companies with both Woodside Petroleum and BHP B...

While BHP has already been sprouting the attributes of the Scarborough project in the outer Carnarvon Basin, while Woodside has begun marketing gas from its remote Scott Reef-Brecknock discoveries to Chinese customers.

Both companies are looking to cash in on an expected surge in liquefied natural gas demand over the next decade with the Browse Basin, which contains the Brecknock field, as one of the likely sources for regional supply.

During the presentation of Woodside’s half-yearly results chief executive Don Voelte said he had just spent four days in China marketing Browse gas to potential customers.

With an estimated 18 trillion cubic feet of gas and 230 million barrels of condensate in the Scott Reef and Brecknock fields 400km north of Broome, Woodside has a creditable development to rival projects such as the controversial Gorgon development and even the Scarborough project.

In addition the Woodside-operated North West Shelf project is in the process of commissioning the newly completed fourth LNG production train at the Burrup Peninsula and expects to approve a fifth train early next year to meet growing LNG demand from China, Korea and Japan.

Further afield, the company is considering developing the Tiof oil discovery offshore Mauritania in parallel with the Chinguetti project, although a firm decision will not be made until after a four-well appraisal drilling program on Tiof which begins before the end of this year.

Woodside has reported seismic data indicated Tiof contains a similar volume of oil to Chinguetti, 25km to the south, which is estimated by Woodside to contain around 120 million barrels of recoverable oil.

Earlier this year Woodside said the $839 million Chinguetti development would provide about 12% of its annual revenue and 11% of its production in the three years from 2006.

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