Mining giant, BHP Billiton Limited (BHP - Free Report) , recently inaugurated the $1.5 billion Macedon domestic gas project in Onslow, Western Australia. After receiving regulatory and environmental approvals in Jan 2012, the Macedon project achieved its first gas production in August this year.
The Macedon project is BHP Billiton’s largest operated gas project in Australia, with a production capacity of up to 200 terrajoules of gas per day. The project is expected to benefit the gas market in Western Australia for the next two decades by providing roughly 20% of the region’s daily gas supply over the years.
The operation includes an onshore gas treatment plant at the Ashburton North strategic industrial area and four offshore production wells. Macedon’s gas production will be supplied to the Dampier to Bunbury Natural Gas Supply pipeline before it is sold in the Australian market.
The project will help BHP Billiton strengthen its base in Australia on the financial as well as environmental front. The company has invested $865 million, roughly 60% of the total project cost locally, contributing to the local economy.
Macedon is a joint venture between BHP Billiton and Houston-based Apache Corp.’s (APA - Free Report) subsidiary, Apache Northwest, where the latter holds 28.57% stake.
BHP Billiton has been investing in new and profitable ventures. Earlier this month, the company started coal production at its Daunia mine, the ninth operating metallurgical coal mine in central Queensland, Australia. The mine is capable of producing roughly 4.5 million tonnes of metallurgical coal per annum and has a useful life of 30 years.
BHP Billiton’s total petroleum production reached 236 million barrels of oil equivalent in fiscal 2013, increasing 6% year over year. Apart from Macedon, the company also has other petroleum projects including, Bass Strait Turrum, North West Shelf Greater Western Flank-A and North West Shelf North Rankin B Gas Compression. With such new and profitable projects in hand, we expect the company to flourish in the coming quarters.
BHP Billiton currently carries a Zacks Rank #3 (Hold). Other mining stocks that warrant a look include Denison Mines Corp. and US Energy Corp. . Both the companies carry a Zacks Rank #2 (Buy).