BHP Billiton and Woodside have highlighted the prospect of a sustained resources boom in Western Australia by listing future projects in the region worth nearly $8 billion.
BHP Billiton and Woodside have highlighted the prospect of a sustained resources boom in Western Australia by listing future projects in the region worth nearly $8 billion.
After announcing record profits last week, both companies said they were reviewing multiple new projects around the globe to benefit from booming commodity prices.
WA will be a big winner, as the new BHP Billiton and Woodside projects join a long list of projects currently under way or planned by other companies such as Rio Tinto, ChevronTexaco, Newcrest Mining and Alcoa.
The resources boom is increasingly flowing through to the profits of companies that service the mining and oil and gas sectors, including contractors such as Monadelphous and Macmahon, engineers Clough and RCR Tomlinson, and mobile accommodation provider Fleetwood.
However, all of these companies have noted that shortages of skilled workers and rising costs have also emerged as major constraints.
Woodside says it plans to make a final investment decision on seven projects this year, including three projects owned by the North West Shelf venture, which is part-owned by BHP Billiton.
The largest of these is the $2 billion train 5 expansion, which would lift the capacity of the gas processing plant on the Burrup Peninsula from 11.7 million tonnes per annum (mtpa) to 15.9mtpa a year.
The North West Shelf venture is also assessing the $900 million Angel project, an offshore gas production platform, and the smaller Perseus 1B project, which involves a subsea ‘tie-back’ to existing infrastructure.
Another advanced project in the region is the $450 million Blacktip development in the Timor Sea.
Engineering design studies have been completed and first production is scheduled by the end of 2007.
Blacktip will supply gas to US company Alcan, which is expanding its alumina refinery at Gove in the Northern Territory.
Yet another project that may get the final go-ahead this year is the $750 million Stybarrow offshore oil field development, owned 50:50 by Woodside and project operator BHP Billiton.
Woodside’s pipeline of new projects is additional to half a dozen offshore oil and gas projects currently under way in WA, Victoria and Africa.
In WA, the biggest of these is the $1.4 billion Enfield project, due to start production by the end of 2006.
Woodside also holds equity in Santos’ $480 million Mutineer project, also located off the state’s north west, which is due to start production next month.
BHP Billiton is assessing 26 capital projects around the globe, with the biggest of these a $3.5 billion expansion of its iron ore production capacity in the Pilbara region to 150mtpa. A final decision is due in coming months, with a view to completing the expansion by mid 2008.
This follows a three-year period of massive investment in its iron ore projects, as BHP Billiton, along with Rio Tinto and other smaller iron ore producers, strive to meet surging Chinese demand.
BHP Billiton has already completed $930 million worth of projects to expand production capacity to 110mtpa and is currently spending another $740 million to lift capacity to 118mtpa.
Apart from iron ore, the other big BHP Billiton project currently under way in WA is the $1.35 billion Ravensthorpe nickel project in the Great Southern region.
It is due for completion by June 2007 and will ship 50,000 tonnes a year of nickel concentrate through the port of Esperance.
BHP Billiton is also the majority owner of the Worsley alumina refinery, where a $250 million upgrade has been plagued by rolling industrial relations stoppages.
The state’s second big iron ore producer, Rio Tinto, is in the midst of its own expansion program.
Rio Tinto is spending $US1.2 billion ($A1.5 billion) expanding the capacity of its iron ore mines and its port and rail infrastructure in the Pilbara.
It will have total capacity of about 170mtpa when the current projects are completed and is assessing a range of further expansion moves.
Another big WA project on Rio Tinto’s radar is the conversion of its Argyle diamond mine in the Kimberley from open-cut to an underground project, to extend the life of the mine.
