Exxon, BHP plan world's largest floating LNG plant off Australia

Tue Apr 2, 2013 7:07am EDT
 
Email This Article |
Share This Article
  • Facebook
  • LinkedIn
  • Twitter
| Print This Article | Single Page
[-] Text [+]

By Rebekah Kebede

PERTH (Reuters) - Exxon Mobil XOM.N and BHP Billiton BHP.AX are planning to build the world's largest floating liquefied natural gas (LNG) processing and export plant off the northwestern shore of Australia, despite growing concerns about the cost competitiveness of the country's LNG projects.

At around half a kilometer (0.3 miles) long, the vessel would be nearly as long as five football fields laid end-to-end and would be the largest floating facility in the world.

The plant would bump up Australia's current LNG production by nearly 30 percent, producing 6 million to 7 million metric tons (6.62 million to 7.71 million tons) per annum (mtpa), enough to fuel the LNG needs of Japan, the world's largest importer of the gas, for about a month.

Exxon and BHP's decision to develop the Scarborough field using floating LNG is another vote of confidence in the as yet untried technology, which energy companies hope will help cut down on the ballooning costs of developing gas.

Exxon, which detailed the plan in a filing with Australia's environment department on Tuesday, did not give a cost estimate for the plant.

Australia currently has $190 billion worth of LNG projects under way and is on track to replace Qatar as the world's largest LNG exporter by the end of the decade.

But the country has been plagued by cost inflation, and of seven LNG plants under construction there that are due to come online in 2014 or later, four have already announced cost blowouts ranging from 15 to 40 percent.

FITCH BEARISH   Continued...

 
A view of the Exxon Mobil refinery in Baytown, Texas September 15, 2008. REUTERS/Jessica Rinaldi