BHP Billiton OKs $1.5B AU Gas Project

BHP Billiton announced approval for development of the Macedon gas field in the Exmouth Sub-basin, Western Australia.

The Macedon Gas Development, to be operated by BHP Billiton, will commercialize natural gas from offshore production lease WA-42-L, located 100 kilometers west of Onslow. First production is expected during calendar year 2013. Recoverable reserves for the Macedon field are between 400 and 750 billion cubic feet of gas. Project costs will be approximately US $1.5 billion, of which BHP Billiton's share will be 71.43 percent (approximately US $1,050 million). The balance will be invested by joint venture partner Apache Northwest with a 28.57 percent interest.

The Macedon project involves four offshore production wells supplying a wet gas pipeline to an onshore gas treatment plant to be constructed at Ashburton North, 17 kilometers south west of Onslow. A sales gas pipeline will be connected to the Dampier to 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.

J. Michael Yeager, Chief Executive BHP Billiton Petroleum 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 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.

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