The BG Group has sanctioned a $15bn liquefied natural gas project in Queensland, Australia. The decision constitutes the company’s biggest investment to date while first LNG exports are expected to commence in 2014.
The decision, a result of three years of planning, arrived following environmental approval from the Australian Federal and State Government. The first phase is now underway and incorporates the development of a two-train liquefaction plant and the associated upstream and pipeline facilities.
The facility will be located at Curtis Island, near Gladstone in Queensland. BG Group Chief Executive, Frank Chapman, commented, “Today’s decision represents the realisation of a pivotal strategic objective for BG Group – to further the globalisation of our LNG business by establishing a new and material source of equity LNG in the Asia-Pacific arena. Today’s sanction is also a significant milestone on the road to delivery of the Group’s growth agenda over the decade ahead.”
The Queensland Curtis Liquefied Natural Gas project, QCLNG, will be run by BG Group’s Australian subsidiary, QGC Pty Limited. Phase one of the project will produce two LNG trains with a combined capacity of 8.5million tones per annum (mtpa). While from 2011, the Group plans to invest approximately $15bn in a four year phase to develop the liquefaction, related wells, field facilities and pipelines.
Fruits of the project are expected in 2014, when the first LNG exports begin. Already countries including Chile, China, Japan and Singapore have committed to purchasing up to 9.5 mtpa of LNG. Chapman added, “I believe the speed of our transition from country entry through major resource maturation to project sanction reinforces BG Group’s reputation for advancing innovative and complex gas chain projects within challenging timeframes, as previously demonstrated in Trinidad and Tobago and in Egypt. This rapid progress is also testament to our strategic global marketing capabilities: QCLNG is anchored in customer agreements across the world’s largest LNG markets for the sale of up to 9.5 million tonnes of LNG per annum.”
Catherine Tanna, Managing Director for QGC described efforts that went into securing the plan. She remarked, “Our decision to proceed follows nearly three years of rigorous regulatory and public review and discussions with more than 4 000 individuals, landholders, indigenous groups, conservationists, industry associations, regional councils and government agencies. Their contributions have played a key role in shaping regulations intended to ensure that this project is good for the environment, good for people, and good for Australia.”
BG is due to release third-quarter fiscal results tomorrow and expects to generate 5,000 local jobs by implementing the plan. Furthermore, the project is expected to boost Australia’s exports by approximately A$4bn.
At this stage competing firms look likely to set-up similar projects; these include the Australian energy group, Santos.
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