Exxon cool on prospects for big WA gas project
Exxon Mobil appears to be in no rush to start work on a big Australian gas project with BHP Billiton, after giving a restrained account of the Scarborough LNG 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.