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UPDATE 2-BHP says long run interest in becoming LNG operator -report

Published 04/27/2011, 07:44 PM
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* BHP wants to be in all energy sources

* Sees iron ore prices remaining strong for 2 years

* Sees no sharp slowdown in China's economic growth

* No impact on Olympic Dam uranium plans post-Japan crisis (Adds iron ore price comments)

MELBOURNE, April 28 (Reuters) - BHP Billiton would be interested in becoming a liquefied natural gas operator in the long term, its chief said in an Australian media interview, amid speculation the top global miner was eyeing Woodside Petroleum .

BHP quashed talk earlier in April that it was getting set to buy Shell's 24 percent stake in Woodside as a precursor to bidding for Australia's top LNG operator.

Analysts interpreted that to mean that no deal was imminent, not that BHP was not interested.

In an interview with the Australian Financial Review from Beijing, BHP Chief Executive Marius Kloppers signalled Woodside would remain on its radar, saying that being an LNG operator was one element missing from the company's energy portfolio.

"That would be something that long term would be a useful thing to have, but I don't think you should read into that there is a burning feeling that the tool kit is light and that that is missing today," Kloppers was quoted saying.

"But it is something that on balance, given that we want to be in all of the energy sources and given that we want -- in the hydrocarbon space -- to be in the various mechanisms that hydrocarbons are produced and transported, it will be something that will be useful in due course."

IRON ORE

Kloppers said high iron ore prices and a switch to shorter-term pricing, while a sensitive issue in China, had not hurt the company's ties in its biggest market, which he has visited twice in the past two months.

"I don't as much see it as about repairing a relationship because at the operating levels, those relationships, I'm very proud of them," he was reported saying.

Kloppers said he was confident that China's moves to curb inflation would not slow the country's economic growth sharply.

"You should be happy about any action that they take before the inflation hits double digits."

"The institutions are very strong, the analytical capabilities are very strong, and any action that is taken early in an inflation cycle is very unlikely to be an overreaction."

He said China's iron ore import needs would outstrip supplies, helping to keep iron ore prices high over the next one or two years. Spot iron ore prices <.IO62-CNI=SI> are around $179 a tonne.

"Over the next two years, in all likelihood, profitability is going to stay high," Kloppers was quoted saying in a separate interview with The Age newspaper. "Possibly even as high as it is."

Kloppers said he did not expect Japan's nuclear crisis to affect BHP's plans to expand the massive Olympic Dam copper and uranium mine in South Australia.

"I think it is a good thing the world is going to take a look at how do we make standards even higher and more onerous," he said. (Reporting by Sonali Paul; Editing by Ed Davies)

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