Santos and GDF Suez SA shelved a plan to use a ship to turn natural gas into liquid offshore and will consider alternatives, including a pipeline to the northern Australian coast.
The companies will not take the Bonaparte floating liquid natural gas (FLNG) proposal into the engineering and design phase at this point, Adelaide-based Santos said today in a statement.
While the partners believe that the gas fields have “material value,” the FLNG plans do not meet their commercial requirements, according to the statement.
Santos, Australia’s third-biggest oil and gas producer, and Paris-based GDF Suez were among companies planning to follow Shell in developing projects to convert gas into liquid offshore.
Woodside Petroleum now plans to use Shell technology for its Browse project off Western Australia.
Santos last year said that it expected an investment decision on whether to go ahead with Bonaparte LNG in about 2015. Citigroup estimated last year that the project would probably cost $8billion to $10billion to develop.
The Bonaparte partners will look at options including sending natural gas by pipeline to Darwin in Australia’s Northern Territory, Santos said.
Santos holds 40% and GDF Suez has 60%, according to the statement.
