BHP Billiton to go ahead with $1.5-bn Australian offshore gas field project

BHP Billiton, the world's largest mining company, which also has interest in oil and gas today said that it has approved the development of the $1.5 billion offshore gas field project in resource rich Western Australia, in order to meet the state's energy needs.

The Macedon offshore gas field project located about100kms off the Pilbara town of Onslow, will be operated by BHP which expects first production to start production in 2013.

The project costs will be approximately $1.5 billion, of which BHP's share will be 71.43 per cent costing it $1,050 million, while the remaining will be invested by joint venture partner Apache Northwest holding a 28.57-per cent interest.

The Macedon project involves four offshore production wells supplying a wet gas pipeline to an onshore gas treatment plant.BHP said a sales gas pipeline will be connected to the Bunbury Natural Gas Pipeline for sale to the domestic gas market in Western Australia.

The gas plant will have a design capacity of 200 million standard cubic feet per day.

Michael Yeager, CEO of BHP's Petroleum division said that the Macedon project would be an important addition to the company's portfolio of Western Australian projects.

"Macedon will be a valuable asset for our Company and will improve the security for domestic gas supplies in both the short and medium term for Western Australia.

It will be the first development in the important Ashburton North area and will make a strong contribution to the overall growth of our Petroleum operations in Western Australia" he said.

Proposals to develop the project were subject to a comprehensive environmental assessment process that involved extensive consultation with the local community and other key stakeholders.

The Macedon Gas Development project will build on BHP Billiton's existing producing interests in the north-west region of Australia including its operated Stybarrow and Pyrenees projects and non-operated North West Shelf Venture, said the company in a statement.