BHP & Esso Sign Long Term Gas

BHP Limited
9 April 2001


Release Time     IMMEDIATE

Date             9 April 2001

Number           34/01


                BHP AND ESSO SIGN LONG-TERM TASMANIA GAS DEAL




BHP Limited (BHP) and Esso Australia Resources Pty Ltd (Esso) have signed a
long-term supply agreement with Duke Energy International (Duke Energy)
enabling the introduction of natural gas to Tasmania.

The supply agreement will provide substantial underpinning volumes for the
pipeline for up to 15 years starting in 2002. The signing follows an initial
Memorandum of Understanding that was signed between Duke Energy, BHP and Esso
in July 1999.

BHP Petroleum Vice President Gas Business Development David McGough said:
'This agreement marks a significant new era for Tasmania.'

'For the first time, Tasmanian businesses and consumers will have direct
access to a long-term competitive gas supply.'

Esso Australia Gas Marketing Director Nick Heath said: 'Experience tells us
that natural gas brings economic growth. Existing Tasmanian industries will
become more competitive and new industries will be attracted to Tasmania.'

Esso/BHP won the contract to supply Duke Energy after demonstrating access to
long-term reserves and willingness and ability to supply competitively priced
gas over a long period.

'Esso/BHP's operations in Bass Strait have been supplying gas to Victoria for
more than 30 years,' Mr Heath said.


'Our plentiful reserves, established infrastructure and world-class gas
production facilities at Longford have proved once again why Esso/BHP is the
gas supplier of choice in South Eastern Australia.'

Esso/BHP will need to increase the capacity of Longford to supply Tasmania.

The Tasmanian supply agreement comes only a few months after Bass Strait gas
began flowing from Gippsland into New South Wales through Duke Energy's
Eastern Gas Pipeline.

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Further information can be found on our Internet site: http://www.bhp.com



Further Information:

Media Relations

BHP

Mandy Frostick

Manager Media Relations

Ph: 61 3 9609 4157

Mob: [phone]



Investor Relations

Andrew Nairn

Senior Investor Relations Analyst

Ph: 61 3 9609 3952

Mob: [phone]

Esso Australia

Chris Welberry

Public Affairs Advisor

Mob: [phone]



Background:

Bass Strait Gas

For over three decades, the Bass Strait oil and gas production system has
supplied much of Australia's daily crude oil requirements and nearly all of
Victoria's natural gas, and is operated by Esso Australia on behalf of the 50:
50 joint venture with BHP Petroleum. The Gippsland Basin is the largest
natural gas supply region in eastern Australia.

Longford Gas Processing Facility

Esso/BHP's Longford gas processing facility consists of three gas processing
plants and a crude oil stabilisation plant. Petroleum, in both liquid and
gaseous form, is extracted from the oil and gas reservoirs using the Bass
Strait production platforms and transported by a pipeline network to Longford
where it is converted to sales gas, raw LPG and stabilised crude oil and
condensate. Natural gas processed at Longford is approximately 200PJ per
annum.

Duke Energy Tasmanian Pipeline

The Duke Energy Tasmanian Pipeline will run from the Esso/BHP Longford gas
processing facility in Gippsland, cross Bass Strait and come ashore in the
region north of George Town. The offshore pipeline will rest on the bed of
Bass Strait, while the onshore pipelines will stretch to Port Latta in the
north west, and Hobart in the south. Duke Energy expects the pipeline to be
completed in the first half of 2002.