Nolan said a floating LNG plant was one among the options that operator ExxonMobil and equal partner BHP Billiton were considering for the field, but it was too early for the partners to make firm decisions or talk about development timetables.
“Scarborough is a very challenging resource,” he said.
“It’s in 900m of water and 300km offshore, and its gas has very little liquids content”.
Nolan agreed that a floating LNG plant would help the Scarborough partners evade the Western Australian Government’s gas reservations scheme. But he said that LNG players and the state government had agreed to discuss reservations on a project-by-project basis and the possibility of reservations was just one factor that would be taken into account when deciding on development options.
Nolan said Scarborough was “a priority” for ExxonMobil and he denied that ExxonMobil and BHP Billiton had ever had major disagreements over the resource or its development.
But at APPEA 2005 in Perth, Nolan told journalists ExxonMobil believed Scarborough was unlikely to be commercially viable in the near term.
"BHP's assessment [of reserves being about 8 trillion cubic feet] is very high and we don't agree," he said.
BHP Billiton’s then group energy president Philip Aiken said at the time that BHP saw Scarborough as a priority while ExxonMobil didn't, and suggested ExxonMobil should consider selling its stake in the field.
After ExxonMobil refused to participate in further assessment of the field, BHP undertook extensive appraisal work on its won with no funding or technical assistance from its partner.
This appraisal work seemed to confirm that BHP’s original assessment was more or less accurate and ExxonMobil has since conceded that the field has somewhere between 5 and 10tcf of gas.
When asked if ExxonMobil’s proposed Papua New Guinea LNG field, to be based on the Hides, Juha and Angore fields, had leapfrogged Scarborough and Gorgon to moved to the front of the company’s development queue, Nolan refused to be drawn. He simply said that all three projects were important and ExxonMobil had teams working on each of them.
While ExxonMobil is the only one of the Gorgon partners that has not yet signed gas supply agreements for Gorgon gas, Nolan said this did not indicate that the company was less committed to the development than its partners Chevron and Shell.
“Marketing for Gorgon is not on a critical path, but we are actively marketing Gorgon gas and are looking for different customers,” he said.
“We are taking our time to ensure we optimise our customer mix and to get the best value for ExxonMobil’s 25% share.”
