Conoco Weighs Larger Darwin LNG Amid Santos ‘Disappointment’
ConocoPhillips (COP) said it still aims to add production at its Darwin liquefied natural gas plant after Australian partner Santos Ltd. (STO) expressed “disappointment” a decision on expansion hadn’t been reached.
ConocoPhillips is looking at “opportunities to expand” the venture in the Northern Territory to as much as 10 million metric tons of LNG a year from about 3.5 million tons, Robin Antrobus, a spokesman for the Houston-based company, said by phone from Perth today. “We will consider all opportunities on their merits.”
While Australia’s third-largest oil and gas company has been “pressing hard” to add capacity by supplying the project with gas from the region, ConocoPhillips “believes there are other options that are better for them,” Santos Chief Executive Officer David Knox said yesterday. “We’ve always said we’d like see Darwin extend and there are a number of ways we can.”
ConocoPhillips started production at the Darwin LNG plant in 2006, supplying customers in Japan. Australia has more than a dozen proposed LNG ventures seeking to tap Asian demand for cleaner-burning alternatives to coal to curb emissions.
“We would like to see, working with Conoco, ways we could expand that project,” Knox said. “Brownfield projects, their economics really sing if you can get the gas into them. We would very much like to do that. We are in discussions with Conoco, but there’s nothing firm right now.”
Antrobus declined to comment on Knox’s remarks.
Santos rose 0.6 percent to A$15.64 by the 4:10 p.m. close in Sydney, compared with a 0.6 percent decline in the benchmark S&P/ASX 200 Index.
The Adelaide-based company is building the $16 billion Gladstone LNG project in Queensland state and planning the Bonaparte LNG venture off northern Australia. It aims to make a final decision to proceed with Bonaparte LNG in 2014 and to begin production in about 2018, Knox said yesterday.
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