Schwarzenegger Rejected Gas Facility Project of Australian Giant

Australia's largest oil producer BHP Billiton Ltd need time to evaluate the future of its proposed California natural gas-import facility after Governor Arnold Schwarzenegger rejected the project.

The US$800 million Cabrillo Port facility, first proposed for off the coast of Southern California in August 2003, would have been able to process enough gas to satisfy about 10 percent of California's demand.

Schwarzenegger rejected the project following the California Coastal Commission and State Lands Commission, which both turned down the proposal last month. The facility would have processed liquefied natural gas.

California does need additional gas supplies, Schwarzenegger said, adding that he "strongly supports" the construction of an LNG facility off the coast of California as long as the state's environmental standards are upheld.