ConocoPhillips may spend $10 billion on LNG plant - Marketplace by Bloomberg - International Herald Tribune

ConocoPhillips, the third- largest U.S. oil company, said Monday that it may spend as much as $10 billion to more than double capacity at its liquefied natural gas plant in Northern Australia to meet an estimated 40 percent surge in world demand.
The company may build a second production unit at the Darwin plant by 2013, using natural gas from either the Sunrise or Caldita fields, off Australia's northern coast, Laura Sugg, president of ConocoPhillips' local unit, told reporters Monday at the South East Asia Australia Offshore Conference. It may then look at a third unit, she said.
ConocoPhillips and partners, which include Santos and Eni, started their 1.6 billion Australian dollar, or $1.2 billion, Darwin LNG plant earlier this year to supply fuel to two Japanese utilities. The Wickham Point site at Darwin has approval for as much as 10 million metric tons a year.
"We have ambitions for going beyond 10, but we would have to go through due process to be able to do our environmental homework and secure the needed permits," Sugg said. The cost of expanding the project, including offshore gas field development and a pipeline to Darwin, could cost between $6 billion and $10 billion, she said.
The Sunrise gas field is owned by Woodside Petroleum, ConocoPhillips, Royal Dutch Shell and Osaka Gas. The Caldita field is owned 60 percent by ConocoPhillips and 40 percent by Adelaide-based Santos.
ConocoPhillips and Santos may outpace rivals in increasing LNG gas output because of their lead in getting environmental approvals to expand. A rival project by Chevron, the second-largest U.S. oil company, in Western Australia may be delayed as a regulator raised concern earlier this month about possible harm to rare turtles.
"Getting expansion approved on an existing site is a lot easier than doing something greenfield," said Frank Harris, co-head of global LNG at Wood Mackenzie Consultants. "ConocoPhillips and Santos just have to find the gas."
A head start may enable ConocoPhillips to benefit from Asian LNG demand, which is forecast by Wood Mackenzie to jump 40 percent to 137.8 million tons in 2010, and gain a further 43 percent to 197.4 million tons by 2015.