Australian Pacific group reach FID for CSG-LNG Train 2

Australian Pacific LNG—a group comprising Origin Energy Ltd., ConocoPhillips, and Sinopec—has reached a final investment decision (FID) to build a second train at the coal seam gas-LNG plant on Curtis Island, near Gladstone in Queensland.

Additionally, Sinopec has formally taken another 10% interest in the project for $1.4 billion, bringing to 25% its stake in the project.

Origin and ConocoPhillips both are looking to further dilute their respective 37.5% interests in the project. Origin has said it would like to reduce its share to 30%.

First LNG from Train 1 is on schedule for 2015. First LNG from Train 2 is eyeing 2016.

The FID was reached a week after Origin signed a 20-year, 1 million tonne/year of LNG offtake deal with Kansai Electric Power.

Meanwhile, Sinopec’s total offtake has grown to 7.6 million tpy following agreement on Train 2.

The APLNG group’s financing arrangement for the downstream part of the project—an $8.6 billion (Aus.) facility from a syndicate of banks including the import-export banks of China and the US—was subject to reaching FID on Train 2.

Origin says the cost of the project is unchanged, aside from foreign exchange movements.

The project will be supplied by CSG fields in the Surat-Bowen basins of southeast Queensland. It now comprises two LNG trains, each with a capacity output of 4.5 million tpy. The first train reached FID in mid-2011 and construction at the Curtis Island plant site is well under way.

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