Exxon cool on prospects for big WA gas project
Exxon and BHP have been jointly appraising the big gas deposit off the West Australian coast, and even submitted design documents to the government's environment department in April.
Exxon had told environmental regulators that a final investment decision on the project could be made next year, with first gas coming into production from 2020.
But on Friday, Exxon vice-president David Rosenthal said he could not name a date for a final investment decision on Scarborough, nor any of the company's early stage gas prospects.
"We don't have an outlook for [final investment decision] and costs on any of those, or certainly not relative competitiveness," he said during the company's quarterly results briefing.
"We are evaluating the potential for floating LNG at the Scarborough prospect and those evaluations continue. But again, I wouldn't want to position that relative to any other project."
In a further dent to Scarborough's chances, Mr Rosenthal said he had not seen any significant improvement in the cost of doing business in Australia, despite widespread job losses in the resources industry over the past year.
But Mr Rosenthal was far more loquacious when asked about Exxon's LNG project in Papua New Guinea.
That project is a partnership with several companies - including Santos and Oil Search - and has even attracted funding support from Australian taxpayers.
Mr Rosenthal said the two processing units at PNG LNG could be joined by a third if gas supply talks with two other companies were successful. "We certainly have the ability to as rapidly as possible expand that facility over the course of the next few years," he said. "We do view that project as quite attractive for us and we certainly look forward to bringing forward some expansion opportunities and continuing to improve even further on those economics."
BHP and Exxon have a long history in Australia, most notably in the Bass Strait oil and gas fields.
If they do proceed with Scarborough, it is most likely to be through new floating LNG technology, similar to what Shell plans to use on WA's Prelude gas field.
Floating LNG technology allows companies to target oil and gas in deeper and more distant fields that would be too expensive to develop from onshore processing plants.
Woodside Petroleum and its partners in the Browse LNG project are also expected to opt for a floating LNG vessel, after deciding that building an onshore plant at James Price Point would cost too much.
Exxon already has exposure to oil and gas in WA, as a minority partner in Chevron's mammoth Gorgon LNG project.
Frequently Asked Questions about this Article…
Exxon had previously told environmental regulators a final investment decision (FID) on Scarborough could be made “next year” with first gas from 2020, but Exxon vice‑president David Rosenthal later said he could not name a date for an FID on Scarborough or any of the company’s early‑stage gas prospects.
The Scarborough gas prospect is being jointly appraised by Exxon Mobil and BHP Billiton, who have been working together on the large gas deposit off the West Australian coast.
Yes. Exxon and BHP submitted design documents for the Scarborough project to the government’s environment department in April, according to the article.
Exxon said it is evaluating the potential for floating LNG at Scarborough. Floating LNG (FLNG) uses vessels to process gas offshore, allowing companies to develop deeper or more distant fields that would be too expensive to service from onshore processing plants.
Exxon’s vice‑president David Rosenthal said he had not seen any significant improvement in the cost of doing business in Australia, despite widespread job losses in the resources industry, and suggested that remained a factor weighing on Scarborough’s prospects.
Exxon was more positive about its Papua New Guinea (PNG) LNG project — a partnership that includes Santos and Oil Search and has attracted some Australian taxpayer funding. Rosenthal said the two existing processing units could be joined by a third if gas supply talks with two other companies succeed, and that Exxon views the project as attractive with expansion opportunities over the next few years.
Yes. Exxon is a minority partner in Chevron’s large Gorgon LNG project in Western Australia, so it already has exposure to oil and gas activity in the region.
If Scarborough proceeds it is most likely to use floating LNG technology, similar to Shell’s Prelude project. The article also notes Woodside and its partners in the Browse LNG project are expected to opt for a floating LNG vessel after deciding an onshore plant would be too costly.
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