BHP approves 1.5 billion dollar Australian gas project
Mining giant BHP Billiton Friday said it would go ahead with a 1.5 billion US dollar offshore gas field project in resource rich Western Australia, as it seeks to meet the booming state's energy needs.
The Macedon project involving four offshore production wells, located some 100 kilometres (62 miles) off the Pilbara town of Onslow, will be operated by BHP which expects to start production in 2013.
BHP will shoulder 71.43 percent (about 1.05 billion US dollars) of the cost of the project with joint venture partner Apache Northwest taking a 28.57 percent stake in the total 1.5 billion US dollar outlay.
"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," BHP Petroleum chief executive J. Michael Yeager said.
BHP said recoverable reserves for the Macedon field were between 400 and 750 billion cubic feet of gas.
Western Australia, which has massive iron ore and other gas and mineral deposits, has few operational gas projects that can supply fuel to its miners, prompting companies such as Santos to try to meet the domestic squeeze.
News of the gas project's green light came as Rio Tinto said it will spend a further 230 million US dollars expanding its iron ore production capacity in the Pilbara.
The miner said the investment, which comes in addition to a 990 million US spend announced in August for Pilbara expansion to 330 million tons per year, will help implement expansion work on the Dampier Port.
-- Dow Jones Newswires contributed to this story --
© 2010 AFP