09.05.2006, 02:44 AM
SYDNEY (XFN-ASIA) – Woodside Petroleum Ltd said costs for the planned phase five expansion of its North-West Gas liquefied natural gas project are estimated to have risen by 21 pct to 2.42 bln aud because of higher labor charges.
The company, 34 pct owned by the Royal Dutch Shell group, said the spike in costs is largely due to a sharp rise, internationally, in labor charges in the construction industry. Woodside operates the project and is a one sixth owner alongside Royal Dutch Shell.
Already more than 14 bln aud has been spent on the LNG project’s development over a 20-year period, making it a major LNG project by world standards.
The fifth phase expansion includes the construction of an LNG processing facility with annual capacity of 4.2 mln metric tons of liquefied gas for export, largely to Asian markets.
Much of the additional gas is destined for China depending on sales contracts being signed, according to energy analysts.
The construction of the new processing train will require about 1,500 workers.
It comes at a time when demand for skilled industrial workers in Australia is at an all-time high because of a large amount of infrastructure projects, particularly within the resources sector.
Strong demand for commodities has prompted a need to build new capacity after many years of under investment in the sector.
The other equal participants in the North West Shelf Venture are BHP Billiton; BP Plc, Chevron Corp and Japanese consortium Japan Australia LNG (MIMI) Pty Ltd, comprising Mitsui Corp and Mitsubishi.
China’s CNOOC is also a member of the North West Shelf Venture and has a 25 pct interest in the a joint venture established in December 2004 to supply LNG to Guangdong Dapeng LNG.
CNOOC does not have an interest in North West Shelf Venture infrastructure.
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