BHP backs floating LNG option
BHP Billiton has ended years of speculation about its intentions for the big but remote Scarborough gas field 300km off the Pilbara, declaring yesterday it stood united behind project operator ExxonMobil in pushing for a floating LNG development of one of the State's biggest gas deposits.
BHP, which is spinning off or selling non-core assets, said it was "excited" about FLNG and described Scarborough as "big (and in) a big tier-one basin (and) we're happy we're in it".
The declarations from BHP's petroleum boss Tim Cutt are in stark contrast to comments he made last year when he suggested a preference for developing Scarborough through existing processing infrastructure at Onslow, despite ExxonMobil's push for FLNG.
But Mr Cutt, speaking from Cancun yesterday after signing a deepwater co-operation deal with Mexican oil giant Pemex, warned against expecting the new alignment with ExxonMobil to spark a speedy development of the field, discovered in 1979.
"We've looked at all the different technologies with ExxonMobil and we're now fully aligned with ExxonMobil," Mr Cutt said.
"FLNG is the direction we're heading. We've got a lot of confidence in the technology.
"The fact the gas is dry actually helps floating technology quite a bit. The quality of the material work is good and ExxonMobil is an excellent operator.
"So, we know it'll go forward, it's a good commercial project.
"When we finally get it all tuned up, we're going to have to look at that against our other opportunities around the world (before committing the capital)."
Scarborough, a big but dry gas resource containing an estimated eight trillion cubic feet, has been languishing while its owners combat the remote location and a lack of infrastructure.
BHP and operator ExxonMobil each have a 50 per cent stake in the field's retention lease, which is due to expire next year.
Progress on development has been difficult to monitor because of ExxonMobil and BHP's reticence to discuss the project. Neither is known for setting aggressive development timetables.
An ExxonMobil spokeswoman yesterday would not discuss what stage of the pre-development process Scarborough was at.
"ExxonMobil is in the early stages of developing the Scarborough project and significant progress has been made," she said. "FLNG is considered the lead development option.
"Development of Scarborough remains challenging due to location, water depth, ocean conditions and resource characteristics, so (it will need) innovation and technical leadership."
