Santos lets FEED contract for CSM-fed LNG plant

Rick Wilkinson
OGJ Correspondent
MELBOURNE, Dec. 22 -- Santos Ltd. hired Bechtel as its front end engineering and design contractor for a proposed 3.5 million tonnes/year coalseam methane (CSM)-fed LNG plant in Gladstone, Queensland.

The $40 million contract is expected to provide an updated estimate of project cost, Santos said. An initial estimate was $7.7 billion. Petronas is working with Santo to produce LNG using CSM.

Santos expects to make a decision during the first half of 2009 on whether to proceed with the project. Construction tentatively is scheduled to being in 2010 with first shipments of LNG scheduled for 2014.

Conventional natural gas reserves in fields close to eastern Australian markets are declining while gas demand continues to grow substantially. CSM resources are close to large potential markets in eastern Australia.

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