US oil player Hess Corporation has finally reached an agreement to process its undeveloped gas resources off Western Australia through the North West Shelf venture, after several years of negotiations in a deal that would allow its $US6 billion ($7.6 billion) Equus gas project to go ahead.
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The long-awaited, landmark agreement will have Hess pay the Woodside Petroleum-operated North West Shelf venture to process gas from the US company's Equus offshore project into LNG, which Hess would then market to customers in the Asia-Pacific region.
Negotiations between Hess and owners of LNG plants in WA have been going on for several years, after the US company decided against building its own LNG infrastructure to process its several gas discoveries in the WA-390-P and WA-474-P permits off the coast.
Potential partners for the processing arrangement also included Woodside's Pluto LNG venture and Chevron's Wheatstone venture, while Hess was also considering developing a floating project.
"This arrangement would bring together Hess' strong deepwater drilling and development capabilities with NWS's proven track record in natural gas processing and liquefaction," said Hess president and chief operating officer Greg Hill said in a statement on Tuesday.
"The combination provides an attractive option for Hess to commercialise its important Equus natural gas resource in a manner that delivers secure, reliable energy supplies into Asia Pacific LNG markets and creates value for our shareholders."
Woodside has yet to confirm the arrangement, but Hess said it didn't expect to give a final investment decision for its Equus project, which would involve several billions of dollars of investment, before 2017.
