LNG Update
April 10th, 2010
Published in the Gladstone Observer
There has been a significant amount of media in recent weeks on a number of developments in the LNG sector not only nationally but also in relation to the Gladstone CSG-LNG projects. The most significant of those in terms of economic impact was the Queensland Curtis LNG project signing a 25-year sales and purchase agreement with the China National Offshore Oil Corporation for the supply of 3.6 million tonnes of LNG a year from 2014. This was reportedly Australia’s largest single company-to-single company LNG contract and a major development in the sale and purchase of LNG based on coal seam gas.
The agreement further underpins the Queensland Curtis LNG project development when considered with the existing 21-year 1.7 million tonnes per annum supply agreement to Chile and a 20-year agreement to supply up to 3 mtpa to Singapore. Queensland Curtis LNG had already announced $3B of orders for long lead items including over 550km of 42” coated steel pipe from China. The pipeline project in itself is a major project and will see the pipe import through Gladstone and Brisbane for distribution by rail. At the other end of market announcements was LNG Ltd (the smaller development on Fishermans Landing) suspending their early site works whilst they work on securing a future gas supplier after the Shell offer for Arrow left the early mover without a committed gas supplier. LNG Ltd is indicating they are developing and pursuing a number of options to possibly get the project back on track in early 2011. The Shell offer for Arrow was a significant development in the Gladstone CSG-LNG projects development and possibly the first of the predicted consolidation of resource and production assets in the sector. Gladstone LNG (Santos & Petronas) have completed their supplementary EIS process and are awaiting the Coordinator General’s Report and conditioning of the project as well as the other necessary approvals to move the project to a Final Investment Decision. Likewise Queensland Curtis LNG completed their Supplementary EIS process earlier in March 2010 and continues to single-mindedly work towards securing the necessary approvals and conditioning to move to a Final Investment Decision at the earliest opportunity. The Australia Pacific LNG project (ConocoPhillips & Origin) has reached another project milestone with the release of their EIS for public comment. The public can provide feedback to the Coordinator General on whether the EIS satisfactorily addresses and manages the impact of the project via the Department of Infrastructure and Planning (www.dip.qld.gov.au/eis) by 5pm Tuesday 4 May 2010. The Gladstone Port Corporation remains a primary stakeholder in the planning and approvals for the port interface for the LNG projects and future maritime operations and is undertaking the Western Basin Dredging and Disposal Project to ensure long term port access for existing and future projects. There are approximately 13 planned or proposed LNG plants in an arc from WA over the NT and PNG to Gladstone so we may continue to see some changes in the LNG landscape for Australia and Gladstone but I have no doubt Gladstone will be the home of the world first coal-seam-gas to LNG export industry in the very near future.