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Australia's Woodside to Propose Added Offshore CA LNG Terminal

With the state's chief energy regulator publicly advocating eventually two offshore liquefied natural gas (LNG) terminals for California, Australian oil/gas exploration and development behemoth Woodside Energy Ltd. will announce Wednesday in Sacramento a fourth proposed LNG project for the state. Its location is unspecified and it is billed as not needing a receiving terminal, according to a report in Tuesday's Los Angeles Times.

As is being done on a smaller scale in the Gulf of Mexico, Woodside reportedly is contemplating using a series of ships that will transport the LNG from its source, convert it to its gaseous state, and transfer the gas into the onshore gas transmission system via a 15-mile subsea pipeline, the LA Times reported. The proposal is being touted as a safer way of transporting and delivering LNG.

Woodside is envisioning a project that will supply as much as 10% to 15% of the state's natural gas supply needs, which would be somewhere between 500 MMcf/d and 1 Bcf/d. The Times report quoted Jane Cutler, president of a Woodside subsidiary leading the California LNG effort and the corporate director of North American LNG, along with Michael Peevey, president of the California Public Utilities Commission, who said he was briefed by Woodside representatives earlier this month.

While speculating that over the next 10 to 15 years California needs two LNG projects, Peevey called Woodside "a large, reputable company that operates [gas] fields on behalf of itself and many others," the Times report quoted him as saying. "If you're going to site an LNG terminal, it seems to me it's vastly preferable to have them offshore rather than sited in a very busy harbor."

Woodside's Cutler told the Times that California's coast presents special challenges because of the "extra sensitivity about the environment," and her firm has already begun to meet with environmental group leaders in the state.

A $19 billion company, the largest publicly held oil/gas E&P company in Australia, Woodside is a major worldwide LNG marketer. The company, based in Perth on Australia's western coast has offices in Houston and Covington, LA, and has interests in 15 Gulf of Mexico platforms, with six additional ones due to begin operations this year. Woodside operates 11 of the current 15 platforms and its Gulf gas currently averages about 60 MMcf/d.

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