Phillips Petroleum Company, parent of Darwin LNG Pty Ltd and other Australian affiliates, has signed an agreement that enables it and its co-venturers to move ahead with the gas development of the Bayu-Undan project in the Timor Sea. Darwin LNG Pty Ltd signed a Heads of Agreement with the Tokyo Electric Power Company (TEPCO) and Tokyo Gas Co. detailing terms for the sale of three million tons per year of liquefied natural gas (LNG). The agreement covers a 17-year period, with the first cargo scheduled for January 2006. Under the agreement, the gas source will be the Bayu-Undan field, located in the Joint Petroleum Development Area in the Timor Sea. Gas deliveries from the field are expected to begin in late 2005. This agreement commits nearly 100% of the proven reserves of this field. The HOA paves the way for Phillips’ plan to develop an LNG facility at Wickham Point near Darwin, Australia, utilising the company’s proven Optimized Cascade LNG Process. It also justifies the initial pipeline infrastructure required to move Timor Sea gas into Australia. The fully integrated development of Bayu-Undan, including the pipeline and LNG plant, is estimated to cost approximately USD 3 billion.
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