BHP - LNG Letters of Intent
Broken Hill Proprietary Co Ld
22 September 2000
BHP SIGNS LNG LETTERS OF INTENT
The Broken Hill Proprietary Company Limited (BHP) today announced that it had
signed Letters of Intent (LOIs) with Tokyo Gas Co. Ltd and Toho Gas Co. Ltd of
Japan for the sale and purchase of liquefied natural gas (LNG) from the North
West Shelf (NWS) in Western Australia.
The agreements were signed by the six North West Shelf LNG Sellers and cover
the supply of LNG for a period of 25 years starting in 2004, building to a
volume of one million tonnes per annum (mtpa) by 2006. (BHP share 0.17mtpa)
The parties will now move to finalise sale and purchase agreements by the end
of 2000.
It is anticipated that further LOIs will be signed with several other Japanese
customers in the coming months and that the final investment decision to build
a new LNG production train with a capacity of up to 4.2 mtpa will be made
early next year.
President BHP Petroleum Philip Aiken said the signing of the agreements
represented an important step forward in establishing the next major phase of
development on the North West Shelf.
'The North West Shelf is a key focus of BHP's gas strategy and expansion of
the existing production facilities will realise further shareholder value from
the large gas resources,' he said.
'We are particularly pleased that two of our valued existing customers are
continuing to demonstrate their commitment to the NWS project by securing
additional long term supplies of LNG.'
Tokyo Gas and Toho Gas were among the eight foundation customers of the North
West Shelf LNG Project when the original contracts were signed in 1985.
Tokyo Gas is the largest gas utility in Japan and accounts for about 40 per
cent of total Japanese gas sales. Toho Gas is Japan's third largest gas
utility and services customers in the industrial centres of Nagoya and
Yokkaichi.
BHP's equity in the North West Shelf Project is 16.67%. The other participants
are Woodside Energy Ltd (operator) (16.67%); BP Developments Australia Pty Ltd
(16.67%); Chevron Australia Pty Ltd (16.67%); Japan Australia LNG (MIMI) Pty
Ltd (16.67%); and Shell Development (Australia) Proprietary Limited (16.67%).
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