Woodside seeks gas deals for massive Pluto project
Woodside Petroleum (ASX:WPL) is trying to reach gas supply agreements with BHP Billiton (ASX:BHP), ExxonMobil and US explorer Hess over the next months in support of a massive expansion of its $13 billion Pluto liquefied natural gas project in Western Australia, analysts say.
Chief executive Don Voelte announced yesterday that Pluto could grow from one to five LNG processing units if it engaged third-party suppliers.
The news came as a surprising development as Mr Voelte had previously told the market that only three trains could fit in Pluto's "footprint" near Karratha.
He, however, revealed on Wednesday that Woodside had now reserved two of Pluto's five LNG processing units for use by third parties, and aimed to finalise deals by the end of the year.
According to Mr Voelte, the company could run the additional trains on behalf of third parties while charging a fee for access to the infrastructure that would still produce a solid return for shareholders.
The company's 90 per cent-owned foundation train at Pluto is nearing completion and projected to be exporting LNG by March 2011.
"We wouldn't continue the discussions if we didn't see a lot of value in it for our shareholders," Mr Voelte said. "To us it's a win-win deal."
Mr Voelte would not name the parties involved in the talks, but analysts said the company was aiming to cut a deal with BHP and ExxonMobil over the supply of gas from their jointly held Scarborough field.
Woodside is also believed to be negotiating with Hess, which has made a series of major gas finds in the Carnarvon Basin.