Santos lets contract for CSG-LNG project in Queensland

Rick Wilkinson
OGJ Correspondent

MELBOURNE, May 17 -- Santos Ltd., Adelaide, has let a contract to Fluor Australia for the engineering, procurement, and construction phase of the upstream facilities for its planned coal seam gas-LNG project in Queensland.

Santos also extended Fluor’s engineering design contract to include $50 million (Aus.) worth of early works activities. The company expects to award formally the EPC contract when it makes its final investment decision on the project.

The scope of work comprises all CSG and associated water-gathering and processing infrastructure for the Fairview and Roma fields in the Surat-Bowen basins.

Santos officials said last week a final investment decision for the project would be delayed at least 6 months while Santos and its JV partner Petronas evaluate the implications of the federal government’s planned 40% resource rent tax on the mining industry (OGJ Online, May 11, 2010). However, Santos said the development remains on track to deliver its first cargo of LNG in 2014.

The project consists on a one-train, 3.6 million tonne/year LNG plant, plus associated field infrastructure, and a pipeline to feed CSG to Gladstone. Santos has 60%. Petronas has 40% and will purchase 2 million tpy of LNG from the Gladstone plant.

In other CSG news, Liquefied Natural Gas Ltd. has announced a fixed-price engineering, procurement and construction cost for its proposed Fisherman’s Landing LNG plant in Gladstone of $720 million. Subsequent trains would cost $300 million each.

The trains will have a nameplate capacity of 1.85 million tonnes of LNG a year with the first expected to take 30 months from start of construction to first LNG production.

LNG Ltd. said capital cost for the marine works, including ship-loading structures, dredging, and reclamation will be $85 million.

LNG Ltd.’s proposed contractors are SK Engineering & Construction and Laing O’Rourke Australia Construction.

Clough Australia, Perth, formed a special CSG division to service the CSG industry in Australia.

Former Delco Energy Australia Chief Executive Officer Mel Whyte will be general manager of the new division. Whyte has more than 20 years experience in engineering, project management, and leadership in the resource sector.

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