ConocoPhillips and partner Origin Energy Ltd. made a final investment decision on Phase 1 of their proposed 2-train coalseam gas-LNG project in Queensland.
The $14 billion first phase gives the go-ahead for the development of a 4.5 million tonne/year LNG train along with infrastructure sufficient to support this and a second train in the future.
The full 2-train project will have capacity of 9 million tpy and cost $20 billion.
Origin MD Grant King said FID for the first phase provided an economically attractive project and allowed all the synergies of a 2-train project to be captured once further offtake agreements are finalized.
The LNG plant to be built on Curtis Island near Gladstone will be fed with gas from several coal seam gas fields in the Surat and Bowen basins.
Proved and probable gas reserves dedicated to the development now stand at 11,775 petajoules.
Known as Australia Pacific LNG (APLNG), the project’s first train is underpinned with a binding 4.3 million tpy offtake deal with China’s Sinopec. Sinopec also becomes a 15% stakeholder in the project for a consideration of $1.5 billion (Aus.). ConocoPhillips and Origin will each retain a 42.5% interest.
The JV now is in advanced discussions with other potential customers regarding offtake agreements to establish the second train.
First production from Train 1 is scheduled for 2015. Pending negotiations, it is hoped Train 2 will be online in early 2016.
Fixed price engineering, procurement, and construction contracts for the LNG facility have been awarded to Bechtel while a joint venture of McConnell Dowell Constructors and Consolidated Contractors Australia will enter a fixed-price pipeline construction contract. Nippon Steel will supply steel pipe through Metal One Corp.
