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BG delivers first gas to Australia's Queensland Curtis LNG project

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BG delivers first gas to Australia's Queensland Curtis LNG project

  • Author
  • Christine Forster
  • Editor
  • Lisa Miller
  • Commodity
  • Natural Gas

BG Group remains "firmly on track" to begin shipments in the second half of 2014 from the world's first coalseam gas-to-LNG project, its CEO said, after first gas was delivered Monday to the plant on Curtis Island in Gladstone.

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The gas was transported via pipeline from coalseam gas fields in the Surat Basin in the eastern state of Queensland to the Queensland Curtis LNG liquefaction facility, operated by BG subsidiary QGC. QCLNG is one of three new coalseam gas-based LNG projects currently under construction at adjacent sites on Curtis Island.

Delivery of first gas onto Curtis Island marks the completion of a two-year project to lay Australia's longest large-diameter buried pipeline more than 540 km (335 miles), BG said in a statement.

The company added that arrival of the first gas onto the island would enable commissioning work to begin on the first of two LNG production trains at the QCLNG facility. The commissioning work is expected to begin in the first quarter of 2014.

The two production trains will have total capacity to produce 8.5 million mt/year of LNG.

"To have first gas on Curtis Island in a little over three years from project sanction is an immense achievement," said BG Group Chief Executive Chris Finlayson. "We are now entering the final construction and commissioning phases and we remain firmly on track to deliver first commercial LNG in the second half of 2014, as scheduled and within the $20.4 billion budget," he added.

"We have overcome many challenges along the way, and we still have more hard work in front of us, but last February I set the tough target to have first gas on Curtis Island by the end of this year, and I am delighted that we have met it," Finlayson said.

The QCLNG project was the first of the three Curtis Island coalseam gas-to-LNG projects to be approved when the green light came in late 2010. At that time, the project was expected to cost $15 billion to develop, but the budget was raised to $20.4 billion in mid-2012 due to the stronger Australian dollar, a rise in the cost of local goods and services, increased costs of compliance, and scope changes.

The other two LNG projects being built on Curtis Island have also suffered cost blow-outs.

The 9 million mt/year Australia Pacific LNG project, operated by ConocoPhillips and Origin Energy, was originally expected to cost $20 billion but is now forecast to come in at A$24.7 billion (US$22.1 billion). APLNG is scheduled to ship its first LNG cargo in mid-2015.

The cost of the Santos-operated Gladstone LNG project has meanwhile risen from A$16 billion to A$8.5 billion. The project is also scheduled to start up in 2015.

--Christine Forster,
--Edited by Lisa Miller,