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Looking to meet the growing demand for natural gas, BHP Billiton, an Australia-based diversified natural resources company, announced that following preliminary discussions it intends to file applications with the United States Coast Guard/Maritime Administration (MARAD) and the California State Lands Commission to construct and operate a liquefied natural gas (LNG) regasification facility. The facility would be located more than 20 miles from Oxnard off the Ventura County coast and would be developed by BHP Billiton LNG International, Inc., a wholly owned subsidiary of BHP Billiton.

This deepwater facility -- named Cabrillo Port -- would be the receiving point for shipments of 'California-bound' LNG.  Cabrillo Port would be a permanently moored facility -- a floating storage and regasification unit, or FSRU. LNG will be stored onboard in traditional LNG storage tanks and will be converted to natural gas through a heat exchange system, and then transported by an undersea natural gas pipeline into the existing pipeline system of the local gas utility.

The applications will seek to obtain a deepwater port license for the right to operate the FSRU in U.S. coastal waters and a land lease from the California State Lands Commission for the right to construct an undersea pipeline to the shore to deliver the natural gas into the local utility system.  The deepwater port license would be issued by MARAD, who is authorized by the Secretary of Transportation to make a decision on the license after it has been processed by the Coast Guard and MARAD.

"We've taken BHP Billiton's long-held expertise in operating offshore floating production facilities and merged it with state of the art LNG carrier, storage and regasification technology, in order to be able to site an FSRU offshore that can deliver much needed natural gas directly into California," said Stephen Billiot, Vice President of BHP Billiton LNG International, Inc.

"We understand California's concern for its coastline and its communities.  Although LNG’s excellent safety record is well documented, we are siting this much needed LNG facility far offshore and away from population centers to ensure the highest level of protection for the California coast and public safety," Mr. Billiot said.

Cabrillo Port will be based 21.5 miles offshore of the City of Oxnard -- outside the existing shipping lanes and marine mammal migratory patterns, as well as away from the Point Mugu U.S. naval testing area and the Channel Island Marine Sanctuary.  The FSRU will be permanently moored to the ocean floor and connected to the shore via a traditional natural gas pipeline.  The natural gas pipeline will come ashore in Ventura County, near Ormond Beach, and connect directly into the local gas utility's pipeline system.

The FSRU design features three "Spherical Tanks" -- state of the art LNG storage tanks -- with the capacity to store the equivalent of 6 billion cubic feet of natural gas. The FSRU will contain eight vaporizers to enable the conversion -- or regasification -- of up to 1.5 billion cubic feet of natural gas per day.  Anticipated average send-out will be approximately 800 million cubic feet per day, or almost 15% of what California requires every day.

Following the filing of the applications with both the Coast Guard and State Lands Commission, BHP Billiton anticipates that both agencies will take the lead, pursuant to federal and state environmental laws, and undertake a joint and cooperative environmental and public review process.  Following public review and approval, BHP Billiton expects the design, fabrication and installation of necessary facilities to allow for operations to commence by 2008.

BHP Billiton's Cabrillo Port provides a unique and environmentally friendly alternative to meeting the energy and environmental demands of California.  Natural gas is a more efficient and cleaner burning fuel than coal or oil, and the FSRU's offshore location minimizes social and environmental impacts while providing a safer and less intrusive locale for its operations.  

BHP Billiton's applications for a deepwater port license and land lease are the first step in a lengthy process that will include other relevant permit applications, significant environmental review, public hearings and community meetings.  As part of BHP Billiton's health, safety, environmental and community operating practices, meetings will be held in appropriate public forums to discuss this project with a wide variety of stakeholders in the region. These will be set, disclosed and in compliance with all applicable regulations.

More information about Cabrillo Port and BHP Billiton is available by calling +1 805 604-2785.

For more information, contact:

Energy Trade and Industry Media: Patrick Cassidy
Tel: +1 713 961 8517 (office)  +1713 542 2133 (cell)

Local California press: Jorge Flores
Tel: +1 805 604-2785 (office)  +1 213 434-1476 (24 hour access)