DARWIN, April 19 (Reuters) - ConocoPhillips and its partners are considering expanding their Darwin liquefied natural gas (LNG) plant in Australia, with backing from other companies with undeveloped gas resources that could feed the plant.
ConocoPhillips has previously talked only about developing a new gas field for around $10 billion to fill the plant’s single production unit, or train, when supply from its current gas source, the Bayu-Undan field, runs out around 2022.
The U.S. oil major has also previously said an expansion in the current market would be challenging due to low oil and LNG prices, and costs that have risen steeply since Darwin LNG was built more than a decade ago.
A $650,000 feasibility study on building a second train is due to be completed this year, the Northern Territory government said on Wednesday, announcing that it would contribute $250,000 towards the study.
“The Territory Labor Government is supporting the feasibility study because this is a significant investment towards the business case for potential expansion at Darwin LNG, potentially creating thousands of jobs during construction and operation,” Northern Territory Chief Minister Michael Gunner said in a statement.
Five joint ventures with undeveloped gas resources off the coast of the Northern Territory are backing the study, with stakeholders including Royal Dutch Shell, Malaysia’s Petronas, Italy’s ENI SpA, and Australia’s Santos and Origin Energy.
“With Darwin LNG, five upstream joint ventures and the Northern Territory Government involved, it is a pioneering example of all of industry and government collaborating on solutions to unlock major investments,” ConocoPhillips Australia West vice president Kayleen Ewin said in a statement.
Darwin LNG is co-owned by ConocoPhillips, Santos, Japan’s Inpex, ENI, Tokyo Electric Power Co and Tokyo Gas Co. (Reporting by Tom Westbrook; Writing by Sonali Paul; Editing by Tom Hogue)