BHP Billiton says the environmental assessment of its multi-billion-dollar Scarborough joint venture is progressing well amid support from the West Australian government.
Joint venture partner ExxonMobil initiated the federal environmental referral process five months ago, submitting plans to build a floating LNG processing plant 220km offshore with a production capacity of six to seven million tonnes a year.
The head of BHP’s conventional gas business Steve Pastor said the environmental process for the remote project in north Western Australia was going to plan.
“Everything about that project is tracking very very well,” Mr Pastor said.
While he did not elaborate further on the Scarborough project, he said BHP would continue to focus heavily on offshore conventional gas exploration.
BHP and equal joint venture partner US oil giant Exxon expect to make a final investment decision on the Scarborough project in 2014.
Exxon says a decision to pursue a floating option will be made by the end of the year while the company hopes to begin drilling wells in 2018/19 and start production in 2020/21.
“Floating LNG is considered the best option for developing Scarborough at this stage although further engineering and design work must be undertaken before a final concept select decision is made,” ExxonMobil said in a statement.
Exxon has also identified eight threatened species, including blue whales, leatherback turtles, loggerhead turtles and southern giant petrel that could inhabit the area around its proposed gas processing plant.
The project is expected to have a production life of between 25 to 35 years and a workforce of around 200 people onboard.
Last month Exxon put its proposal up for public comment for 10 days and said no further information was required by the Commonwealth Environment Ministers delegate.
The Scarborough project is located in Commonwealth waters and is estimated to cost around $10 billion.
Shell’s Prelude FLNG project is expected to cost about $12 billion.
WA Premier Colin Barnett is backing the Scarborough floating LNG project despite his opposition to Woodside moving its Browse project offshore to utilise floating LNG.
Mr Barnett said there had already been large investments in onshore gas processing facilities for the Canarvon Basin, with the North West Shelf project, Pluto, the $53 billion Gorgon project and the $30 billion Wheatstone project.
“In that context I don’t have a problem with floating LNG at Scarborough. Where I have an issue is the Browse Basin to the North,” he said.
