NWS JV signs LOI with Hess subsidiary to process resources

Woodside, as operator of the North West Shelf (NWS) project, advises that the NWS project participants today signed a nonbinding letter of intent (LOI) with Hess Exploration Australia Pty Ltd. to process resources from Hess’ permits in the Carnarvon Basin.

The LOI forms the basis for the negotiation of binding agreements in 2015, and specifies the proposed terms, including tariff fees, to toll resources from WA-390-P, WA-474-P, and potentially other permits, through the NWS project’s gas plant in Karratha, Australia. It is intended that, subject to the parties entering into binding agreements, Hess will deliver gas to the NWS project’s offshore infrastructure for processing at the Karratha gas plant and will market and deliver its own volumes.

Hess intends to develop its natural gas discoveries in its deepwater permits offshore northwestern Australia and, subject to execution of binding agreements, toll the production through existing NWS processing and liquefaction facilities in Karratha. Hess would then market liquefied natural gas (LNG) to customers in the Asia Pacific region.

Hess holds 100% interests in both the WA-390-P and WA-474-P permits that contain the Equus fields. These permits cover over 1 million acres and are located 115 miles off the northwest coast of Australia in water depths of approximately 3,600 feet. An Equus sanction decision is not expected before 2017.

NWS is a joint venture between Woodside Energy Ltd. (operator, 16.67%), BHP Billiton Petroleum (North West Shelf) Pty Ltd. (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 Australia Pty Ltd. (16.67%). Hess and the NWS JV plan to conduct joint engineering studies and further progress commercial discussions.

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