New York-based Hess Corporation’s (HES) Australian subsidiary, Hess Exploration Australia Pty Ltd, has inked a non-binding Letter of Intent (LOI) with the North West Shelf (NWS).
Hess aims to develop its natural gas discoveries in its deepwater permits offshore north-western Australia. Subject to execution of binding agreements the company intends to toll the production through existing NWS processing and liquefaction facilities in Karratha, Australia. Subsequently, Hess will market liquefied natural gas (LNG) to customers in Asia Pacific.
NWS is a joint venture between Woodside Energy Ltd., and other companies like BHP Billiton Petroleum (North West Shelf) Pty Ltd, BP plc (BP), Chevron Corp. (CVX), Japan Australia LNG (MIMI) Pty Ltd and Shell Australia Pty Ltd. Hess and NWS propose to carry out joint engineering studies and advance commercial discussions.
NWS’s proven track record in natural gas processing and liquefaction along with this arrangement will further strengthen Hess’ deepwater drilling and development capabilities. This combination will also help Hess to market its vital Equus natural gas resource in order to deliver secure and reliable energy supplies into Asia-Pacific LNG markets and increase shareholder value.
Hess holds 100% interests in both the WA-390-P and WA-474-P permits that contain the Equus fields. Located about 115 miles offshore Australia in water depths of nearly 3,600 feet, both the permits spread over an acreage of over 1 million. An Equus sanction decision is not anticipated prior to 2017.
Hess is an integrated energy company engaged in oil and gas exploration, production (E&P) and refining as well as marketing. The company’s E&P activities take place in Algeria, Australia, Azerbaijan, Brazil, Denmark, Egypt, Equatorial Guinea, Gabon, Ghana, Indonesia, Libya, Malaysia, Norway, Russia, Thailand, the United Kingdom and the United States.
Hess carries a Zacks Rank #4 (Sell). Investors may consider Spectra Energy Partners, LP (SEP), which sports a Zacks Rank #1 (Strong Buy).
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