Work to start on Bayu-Undan Timor gas project

Houston-based energy giant ConocoPhillips announced Sunday it would begin work on a $1.5 billion gas development project in the north Australian city of Darwin, having received final approval from the Timor Sea Designated Authority.

ConocoPhillips said work will begin immediately on engineering, procurement and construction of a 3 million ton per year gas liquification plant.

The company will also build a pipeline from the Bayu-Undan gas field, about 300 miles northwest of Darwin, to the Darwin facility to supply Japanese customers with gas for 17 years from 2006.

The Bayu-Undan gas field is thought to contain a massive 400 million barrels of condensate and liquefied petroleum gas and 3.4 trillion cubic feet of natural gas.

"This landmark approval by the Timor Sea Designated Authority marks a significant event for the further development of reserves in the Timor Sea area," Stephen Brand, president of ConocoPhillips' Australian affiliate, ConocoPhillips 91-12, said in a statement.