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AFX Asia (Focus): Australia’s Woodside approves 11.2 bln aud Pluto LNG project development -UPDATE

Published: Jul 27, 2007

(Updating to include CEO comments)

SYDNEY (Thomson Financial) – Woodside Petroleum Ltd, Australia’s largest oil and gas producer, said Friday its board has approved an expenditure of 11.2 billion Australian dollars on the development of the Pluto liquefied natural gas (LNG) project in northwestern Australia.

The company, 34 percent owned by the Royal Dutch Shell group, said the project is based on Woodside’s Pluto and Xena gas fields located about 190 km northwest of Karratha, in permit WA-350-P.

The initial phase will include a single LNG production train with forecast production of 4.3 million tonnes per annum, connected by a 180-km offshore pipeline to a platform in 85 meters of water.

Wooside said first gas is expected to be produced in late 2010.

It said about 796 million dollars have already been spent on all phases of the Pluto field and LNG project.

Woodside said the project is underpinned by 15-year sales agreements with Japanese utilities Tokyo Gas and Kansai Electric, totaling up to 3.75 million tonnes per annum of LNG.

Woodside expects to sell the remaining output through additional term contracts or spot sales.

The project will be funded using Woodside’s free cash flow from its Australian operations, a fully underwritten dividend reinvestment plan and corporate debt.

Woodside chief executive Don Voelte said the Pluto LNG project, together with the North West Shelf LNG venture in the same region, will underpin Woodside’s future for decades.

Woodside has a one-sixth interest and is the operator of the North Shelf Venture, which became Australia’s first LNG project when it began production in the 1980s.

Voelte said approval of the Pluto expenditure would allow the project to meet the timetable envisioned when Woodside announced plans for its development in 2005.

“We are delivering on our promise that we would sanction this project two years after we discovered the Pluto gas field, and we similarly expect to deliver on our forecast of first gas by the end of 2010,” Voelte said.

(1 US dollar = 1.14 Australian dollars)

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