ConocoPhillips, the third-largest U.S. oil producer, plans further drilling this month in the Timor Sea to find more natural gas for processing through a $1 billion plant it's building in northern Australia.
ConocoPhillips's liquefied natural gas plant at Darwin, Australia's second LNG project, will produce about 3.5 million tons a year for delivery from March to Japanese buyers. The plant has a contract to supply LNG to Tokyo Electric Power Co. and Tokyo Gas Co., Japan's biggest power and gas utilities.
ConocoPhillips said May 17 it may ship Timor Sea gas to an import terminal it plans to build with Mitsubishi Corp. in Long Beach, California, to meet rising U.S. demand. The Texas-based company said last month it aims to expand the Darwin plant by 2010 and is studying options to increase gas supply.
``If you've got a plant already the economics of expanding that are going to be better than'' building a new one, Jon Ranney, an LNG consultant at ACIL Tasman in Perth, said in an interview May 30. ``People are always going to be looking for ways to expand.''
The proposed $450 million Long Beach project is one of more than a dozen LNG terminals proposed by companies seeking to profit from imported fuel as North American gas output fails to keep pace with consumption. The U.S. Energy Department estimates gas imports will quadruple by 2010 as domestic fuel output lags demand.
PIN/BLOOMBERG
News ID 54599
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