BHP approves development of Minerva gas field

BHP Billiton has approved the development of the Minerva gas field in Victoria. The company said capital expenditure for the development in the offshore Otway Basin would be about $ 137 mm (A$ 250.7 mm), of which BHP Billiton's share would be $ 123 mm.
BHP Billiton said most of the Minerva gas would be sold under contract into South Australia via a new pipeline infrastructure link, which would connect the Victorian and South Australian principal gas transmission systems. "The sale underpins BHP Billiton's strategy to sell gas from Victoria into four eastern states markets as well as opening an additional gas supply source," the company said. "The Minerva field development is a greenfield project that will commercialise an intermediate-sized gas resource and provide a robust economic return," the company said.

Minerva, a natural gas field with a small amount of liquid condensate, has an expected life of 10 years. It contains estimated proven and probable gas reserves of 301 bn cf of gas, withBHP Billiton's share 271 bn cf. It also contains 1.24 mm barrels of liquids, with BHP Billiton's share 1.1 mm barrels.
The development involves the drilling and installation of two subsea well completions in 60 metres of water, approximately 10 km offshore from the township of Port Campbell. Construction will commence during 2002, with the first gas expected in the first quarter of 2004.
In March this year BHP Billiton signed a take or pay gas sales agreement with Pelican Point Power, a wholly-owned subsidiary of International Power, for the provision of Minerva gas over a 10 year period into a greenfield 680 km pipeline terminating in Adelaide. "Volumes in the gas sales agreement will underwrite the Minerva development with up to 90 % of BHP Billiton's share of reserves being contracted," BHP Billiton said.

The remainder of the gas will be sold in the south-east Australian market as demand dictates. BHP Billiton Petroleum president and CEO Philip Aiken said the development of the Minerva gas fieldwas part of the group's focus on gas commercialisation and represented a key element in its Eastern Gas Strategy.
"The development of the Minerva field will assist us in building on the large gas market share that the group has developed in Victoria over the past 30 years by enabling us to expand into other south eastern Australian states," he said. BHP Billiton holds a 90 % interest in the Minerva field and will be the project operator. The remaining 10 % interest is held by Santos.