Eni Is `Very Close' on Australia Gas Sale Accord, Minister Says


June 19 (Bloomberg) -- Eni SpA, Europe's No. 4 oil company, is ``very close'' to signing a contract to sell gas from its Blacktip field off Australia's northern coast to a local utility, said Clare Martin, Northern Territory's chief minister.
The development of the Blacktip field, together with plans by AED Oil Ltd. to develop the Puffin oil field and Coogee Resources Ltd.'s project to exploit the Swallow and Swift North oil discoveries, would increase output off northern Australia, Martin said today at the South East Asia Australia Offshore Conference in Darwin, Australia.
A contract between Rome-based Eni and Power and Water Corp. would result in an investment of about A$750 million ($553 million) to develop the Blacktip field and pipe gas to the utility, the Northern Territory government said in December when an initial accord for the sale was signed. Australian Pipeline Trust, the nation's biggest gas pipeline owner, said in May it may build a A$130 million pipeline to transport the gas.
``The Territory's Power and Water Corporation and Eni Australia are very close to executing a gas sales agreement for Blacktip gas,'' Martin said at the conference.
Martin favors developing some of the Northern Territory's gas fields for use within Australia, rather than exporting all the state's gas discoveries overseas in the form of liquefied natural gas.
``We can't afford to send every molecule of gas overseas,'' Martin said. ``We must add value to it here in Australia.''
Coogee Resources, a closely held oil company, is also considering a floating methanol plant tapping reserves from its acreage in the Ashmore Cartier region off the northern coast, she said.
Inpex Holdings Inc., Japan's largest oil exploration company, plans to drill an appraisal well at its Abadi gas field, situated in Indonesian waters 400 kilometers (249 miles) from Darwin, later this year, Martin said.
``Reserves at Abadi are currently estimated at 5 trillion cubic feet, but with the promise of much more,'' Martin said.
Santos Ltd., Australia's third-biggest oil and gas producer, started drilling an appraisal well on May 27 at its Evans Shoal gas field off the northern coast, while Santos and ConocoPhillips plan to drill the Barossa exploration well and an appraisal well at their Caldita discovery later this year, Martin said.
To contact the reporter on this story:
Angela Macdonald-Smith in Darwin at
amacdonaldsm@bloomberg.net.