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Gas Route to Cross Australia Considered

September 23, 2003|From Bloomberg News

ChevronTexaco Corp., Royal Dutch/Shell Group and rivals are studying pumping natural gas across Australia through a pipeline costing more than $668 million to tap rising demand in the populous eastern states.

Two trans-continental routes were being evaluated to ship gas as far as 2,486 miles from fields off northwestern Australia to cities such as Sydney, said Daniel Smith, a Western Australian government spokesman.

A pipeline would have to cross the arid Great Victoria Desert, where temperatures can exceed 104 degrees, to the Moomba gas plant in central Australia.

ChevronTexaco, the No. 2 U.S. oil company, wants customers for its $7.5-billion Gorgon project while Exxon Mobil Corp., Shell and BP all have stakes in fields off Western Australia that could supply a trans-Australian pipeline as well as customers in the U.S. and Asia.

Gas demand may outstrip supply in the southeast by as soon as 2008, the Australian Pipeline Industry Assn. says.

"It's a study that's looking at the infrastructure requirements to marry the offshore gas fields with onshore potential customers," said Geoff Hegney, domestic gas marketing manager at ChevronTexaco's Australian unit. "The pipe route could be as long as 2,900 kilometers."

Epic Energy, Australia's largest owner of gas pipelines, and Australian Pipeline Trust have already both done preliminary studies on piping gas from northern and northwestern Australia.

Natural gas prices in Victoria state fell on Saturday to $1.93 a gigajoule, VENCorp. said.

"We are looking at all opportunities, it's the ones that are commercial and, more importantly, that can deliver a market as soon as possible ideally in parallel with the LNG development," ChevronTexaco's Hegney said. "We have to respect difficult areas such as shifting sands in the desert and native title areas, and any other hazardous areas."

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