Asia Pulse: AUSTRALIA’S WOODSIDE IN TALKS TO SELL GAS TO TAIWAN’S CPC CORP

Published: Sep 11, 2007

MELBOURNE, Sept 11 Asia Pulse – Oil and gas producer Woodside Petroleum Ltd (ASX:WPL) says it has held talks to sell gas to CPC Corp of Taiwan, possibly from its Browse project in Western Australia.

Woodside said that the company was in “discussions with potential Asian buyers about significant volumes of liquefied natural gas (LNG) and that a key terms agreement may soon be signed”.

The oil and gas producer confirmed the discussions included CPC Corp.

A Woodside spokesperson declined to confirm the talks centred around Browse but market speculation suggests the project is the likely source.

Browse is located about 425 kilometres north, north-west of Broome in WA and contains an estimated 20 trillion cubic feet of gas and 300 million barrels of condensate.

Woodside signed up the venture’s first customer last week, finalising a deal to supply about 2 to 3 tonnes of LNG per annum to PetroChina.

The supply agreement is for a period of 15 to 20 years starting in 2013 to 2015 and is expected to bring revenue of A$35 billion to A$45 billion (US$37 billion) into Australia.

While the financial details remain confidential, brokerage UBS estimates PetroChina may have agreed to pay US$7 to US$9 per million British thermal units for the gas, valuing the deal at about A$45 billion.

Woodside has indicated Browse has the capacity to produce up to 14 million tonnes of LNG annually.

Woodside managing director and chief executive Don Voelte was bullish on the outlook for LNG when delivering the company’s half year results in August.

“The people that are acquiring LNG around the world, especially in the Asia-Pacific, are growing,” Mr Voelte said.

“There is a recognition of what LNG is worth and we’re seeing that show up in sales negotiations.”

The Browse project is 47 per cent owned by Woodside, with BP, BHP Billiton Ltd (ASX:BHP), Chevron and Royal Dutch Shell holding various stakes in the venture.

Woodside, which recently gave the green light for its A$12 billion Pluto LNG development in WA, is increasingly focussing its attention on the LNG market.

Along with Browse and Pluto, Woodside has a stake in the undeveloped Sunrise project in the Timor Sea and the company is the operator of the North West Shelf Venture in WA.

(AAP)

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