Woodside Petroleum is in talks with five parties to potentially buy gas to underpin the expansion of its

Pluto

liquefied natural gas (LNG) development in Western Australia.

The first LNG processing 'train' at Pluto is 72.5 percent complete and the company has all of the 4.85 trillion cubic feet (tcf) of gas it requires for this project, leaving a spare 0.4 tcf of gas for the Pluto Train 2 development.

Chief executive Don Voelte said on Wednesday that the company needed to identify 1.4 to 2.7 tcf of gas for Pluto 2, which should be both sourced internally and bought from other parties.

Voelte said Pluto Train 2 required 3.8 tcf of gas for 15 years of production and 5.1 tcf for a 20 year operation.

"We expect the equity capacity designated to other resource owners to be approximately 1.5 tcf," he told journalists.

"In addition, another 0.5 tcf will come from existing discoveries or other gas secured commercially.

"Therefore we need to identify 1.4 to 2.7 tcf of gas that (will be) probably accumulated from our 20 plus well exploration drilling program coming up.

"The expected range of (gas) volumes from discoveries from this portfolio easily exceeds these requirements.

"Woodside would not need to get the exploration discoveries developed to supply Train 2 until 2016."

Pluto Train 1 is expected to produce first LNG in 2011 while Pluto Train 2 could come online in 2013.

Woodside recently revealed it was in non-binding, non-exclusive talks with Apache Energy Ltd to potentially buy gas for Pluto 2.

Woodside on Wednesday posted first half net profit of A$898 million (US $741.57 million), down 12 percent on the prior corresponding period, due to lower energy prices.

Shares in Woodside were up A$2.19, or 5.13 per cent, at $44.91 at 1433 AEST.

(C) 2009 Asia Pulse Pte Ltd.