Australian oil and gas firm BHP Billiton has backed plans to develop what may be the world’s largest floating LNG project, saying it is “fully aligned” with partner ExxonMobil.
But, the project is still facing difficulties, according to a statement from Exxon to news agency Bloomberg.
Exxon needs to find ways to make the venture more profitable and overcome challenges including the location and water depths, its Australian unit wrote in an e-mail response to questions.
“We’ve progressed it far enough now that we’re confident in the technology and the commerciality, so we know it will go forward,” Tim Cutt, president of BHP’s petroleum and potash division, told reporters on a conference call, said Bloomberg.
BHP, the world’s largest mining company, will weigh the proposed Scarborough floating LNG development off the west coast of Australia against other investments, Cutt said.
Turning natural gas into liquid at sea is potentially cheaper than processing it onshore as it eliminates the need for pipelines to the coast. Shell in Australia is developing the Prelude floating LNG vessel - a first for the industry. Others are following suit, including Petronas.
Scarborough, discovered in 1979, is in lease WA-1-R in the Carnarbon basin off the coast of Western Australia, about 220km northwest of Exmouth in 900m water depth. It is one of the most remote of the Carnarvon Basin gas resources.
Exxon gas said FLNG is considered the best option for developing Scarborough, but that further engineering and design work must be undertaken before a final concept select decision is made.
According to an environmental statement prepared by Exxon, the FLNG facility will be about 495m-long, 75m-wide and will process around 6-7 million tons per annum of LNG from five processing trains.
About 12 production wells will be drilled in two phases, with about seven drilled 2018-19 and a further five within 15 years of phase I start-up. Estimates for first gas have been put at not before 2020.
According to Reuters, BHP had previously preferred to tie the field in via subsea pipelines to existing production facilities along the coast, such as the North West Shelf project.
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