BHP Billiton, ExxonMobil to Expand Longford Gas Plant for $1B for Cleaner Fuel

Global resource companies BHP Billiton and ExxonMobil will expand the Longford gas plant at the Gippsland region in Victoria at a cost of $1 billion.

The two companies will construct a separate gas conditioning plant at the Longford facility to treat gas tapped in the Kipper, Tuna and Turrum fields in Bass Strait. The move is expected to create 250 jobs.

The plant is needed due to the higher level of carbon dioxide that the gas from those fields will emit as an added step before the resource will be processed at the existing Longford facility before the resource companies sell the commodity.

The three fields are jointly being developed by BHP, Exxonmobil and Santos costing $4.4 billion, making it Australia's largest non-export gas development.

It took over five years for the conditioning project to push through, with civil work on the facility expected to being in the third quarter of 2013. The plant will process 400 cubic metres of gas per day and expects to be sold as the first treated gas by 2016.

ExxonMobil Australia Chairman John Dashwood said the new facility will help meet the anticipated increase in demand for gas in the coming years as Australia's energy consumption expands continuously in the next two decades.

The three fields, according to estimates, have enough oil and gas to power the electricity requirements of a city with 1 million residents for 10 years. Cost to develop the fields, however, as escalated by more than 65 per cent because of technical issues, including contamination of mercury.

The Sydney Morning Herald reported that the carbon dioxide removed during the first stage of processing will be released into the environment, but the plant will have the capacity to adapt to carbon capture and storage technology if it would be proven viable.

While increasing investment in Victoria's gas sector, BHP, the world's largest mining company, announced on Saturday that it would sell its 11 per cent stake in the Browse Development in Western Australian for $1.56 billion to China's largest oil company, PetroChina.