Media Releases
GEIDB closes in on LNG project
31st May, 2007
GEIDB closes in on LNG project
The Gladstone Economic and Industry Development Board (GEIDB) today confirmed that it is working closely with Perth based LNG Ltd to establish a
$US 350 million facility to produce liquid natural gas (LNG) at a site in the Gladstone region.
GEIDB chief executive, Randall Byram, explained that the proposed plant would be fed with gas from reserves controlled by Arrow Energy, a Queensland based company that holds substantial coal seam gas resources around Moranbah, 450 km north west of Gladstone. Gas from Arrow's other resources in Queensland may also be drawn upon.
LNG Ltd and Arrow Energy have both issued statements to the Australian Securities Exchange outlining the proposed venture. The companies aim to see Gladstone become home to a facility with a stage one capacity to produce up to 1 million tonnes of LNG per annum. A second stage could be added in later years.
It is possible that gas for the proposed plant may be transported through the Central Queensland Gas Pipeline, initially proposed by Enertrade. This pipeline project is currently going through environmental impact assessment.
LNG is used primarily as a fuel for transport and electricity generation purposes. It is made by purifying, compressing and chilling natural gas to approximately minus 160 degrees Celsius, a process known as liquefaction. Due to its density, approximately 600 times greater than natural gas, LNG is well suited for intercontinental transportation where distances and ocean separation between producer and consumer are not practical for pipeline systems. LNG has a lower greenhouse gas intensity than coal and is expected to be in high demand.
Mr Byram highlighted the potential strategic significance of the announcement.
"Diversifying Gladstone's economy beyond the aluminium and coal trades is the core of our development strategy. This LNG proposal is a welcome step toward achieving the strategy. It would provide a vital hedge to coal exports as LNG is a trade that is likely to prosper significantly from carbon abatement policies in Asia, Europe and North America" he said.
Mr Byram explained that while the proposed plant would still need to pass environmental impact assessment it may be the start of an important trend.
"If the LNG Ltd / Arrow project can come to fruition it may act as a catalyst for other gas processing projects to establish in Gladstone. GEIDB is progressing investigations with a number of companies that are looking at a range of alternatives".
Media Contact: Mr Randall Byram
Level 3, 72 Goondoon St,
Gladstone QLD 4680
Tel: 07 49712318 Email: randall.byram@gladstoneindustry.org.au
