UPDATE 1-Woodside: Australia carbon plan may double costs

Mon Oct 20, 2008 1:52am EDT

(Adds Chevron comment)

PERTH Oct 20 (Reuters) - Australia's proposed carbon emissions trading scheme could more than double operating costs of the North West Shelf liquefied natural gas (LNG) plant, operator Woodside Petroleum Ltd's (WPL.AX) chief executive said on Monday.

Australia has pledged to launch a carbon emissions trading scheme by 2010, but Prime Minister Kevin Rudd has been under increased pressure from industry groups who have said a scheme could drive manufacturers out of business or offshore.

Australian LNG exporters have been lobbying the government vigorously on the scheme, after a government discussion paper in July excluded them from groups that would receive free permits as the scheme was phased in.

"In a world that starts carbon prices at A$20 a tonne and doubling overtime to A$40, we see our operating costs doubling or even more than doubling," Woodside CEO Don Voelte told reporters on the sidelines of an industry conference in Perth.

"Our operating cost at North West Shelf is just about half a billion dollars a year, so if you lay that down on top of this, it will be a real differential."

Chevron Corp (CVX.N) added its voice, saying the scheme could increase the operating costs of its proposed 15 million tonnes a year Gorgon and Wheatstone LNG projects in western Australia by between A$100-A$200 million ($69-139 million) each a year.

"This is an additional cost that could put the viability of these massive investments in jeopardy," Roy Krzywosinski, managing director of Chevron's Australian unit told the same conference. (Reporting by Fayen Wong)

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