Woodside Petroleum has announced plans to restart gas exploration as part of a plan to expand its $15 billion flagship Pluto LNG project.
The oil and energy giant said it will implement two drill rigs to explore waters near Pluto in early 2014, targeting up to eight natural gas prospects.
Woodside wants to expand Pluto because existing infrastructure makes it cheaper to add on extra LNG processing units than starting new developments.
Company chief, Peter Coleman, also doused rumours of an acquisition which analysts said is needed as its production growth has started to lag, The Australian reported.
Coleman said potential targets currently look too expensive.
"When you look at prices and so forth, it's not clear to me that it's a good time to be out in the market at all," Coleman said.
He said Woodside would only be interested in acquiring willing sellers, and isn't looking at hostile takeover bids.
Woodside was part of an LNG industry warning this week that $150 billion dollars worth of investment in Australia could be lost if the high cost of building major projects is not fixed within eighteen months.
The company have instead opted to develop the gas through floating LNG.
Late last year, Shell Australia chair Ann Pickard touted FLNG as the saviour of LNG development in Australia.
"We do see it as probably the potential saviour of the Australian LNG industry over the next decade or so.
“Australian LNG is the highest cost globally,” she said, stating that countries like the United States and Canada could export to Japan 20 per cent cheaper.