Nexus Energy revealed Thursday, through an address made by its chairman, that the company is keen to work with its joint venture partners to develop the Shell-operated Crux development – sited offshore Western Australia – as a standalone floating liquefied natural gas (LNG) project.
The company's address comes amid recent media and consultant reports, which have drawn attention to the fact that all seven of Australia's new LNG projects – four projects which draw from gas fields in Western Australia and three from Queensland – will be looking at large project cost blowouts amid labor shortages, a strengthening local currency and increased regulation.
Shell revealed Tuesday that it could delay its final investment decision (FID) on the Arrow LNG project, a joint venture with PetroChina, forecasted to cost around $20 billion. Shell had acknowledged that it is not rushing into an FID for Arrow, given considerable permitting, infrastructure and development bottlenecks on Curtis Island.
Nexus had disclosed earlier on Aug. 3 that the development considerations for the Crux field include a tie-in to Shell's Prelude FLNG vessel, a standalone FLNG project or an integrated gas recycling scheme.
"Crux is strategically located in the East Browse Basin off Western Australia, a world class petroleum system. It is rich in liquids, has manageable carbon dioxide content, and benefits from moderate water depths and close proximity to export markets," the company's Chairman Don Voelte noted in the statement.
Nexus inked an Aug. 3 agreement with Shell and Osaka Gas following board approvals to form a new joint venture which will accelerate the exploration and development works of the field.
The agreement sees Shell taking its place as the operator of the production license AC/L9 with an 80 percent interest. Nexus and Osaka Gas hold a 17 percent and 3 percent interest respectively.
The field is estimated to hold 1.8 trillion cubic feet of gas and 66 million barrels of liquids, a published presentation by Nexus on Nov. 17, 2011 shows. Osaka Gas, alongside with other major Japanese trading houses and power plant operators, have been investing heavily in new LNG projects following Tokyo's announced commitment to phase out the use of nuclear power by 2040.
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