Efforts by offshore northern Australian gas developers to secure a market for their gas have evolved beyond LNG and other conventional supply options to encompass a world-scale synthesis gas (syngas) generation plant with downstream opportunities that include a gas-to-liquids facility.
Ultimate project costs could reach $5 billion.
Shell Development Australia and Woodside Energy Ltd., partners in the Northern Australia Gas Venture (NAGV), last week signed a letter of intent with Methanex Corp., Vancouver, BC, for the supply of about 110 petajoules/year of natural gas. The gas is to be used for a proposed large-scale syngas plant near Darwin.
NAGV, which was formed to deliver offshore natural gas to Australia's Northern Territory, holds numerous interests in both discovered and potential gas fields in the Timor Sea off the northern coast of Australia (OGJ, Mar. 29, 1999, p. 25). Currently, the Greater Sunrise fields are being used as a development base case against which other options are being considered. Among the initial considerations to market the gas was an LNG export project.
NAGV is also looking to sign more customers for the gas and is presently in talks with two companies: Australian alumina refiner Nabalco, for the supply of gas to an existing alumina refinery at Gove, NT; and Gasgo, owned by Power & Water Authority (PAWA) of the Northern Territory, for gas supply to PAWA's power stations.
Uses for syngas
Methanex is looking into products and technologies that could come from the proposed syngas facility. Options include the production of methanol, hydrogen, or gas-to-liquids. Methanex is also seeking other downstream customers-for methanol for the production of ethylene and propylene, as well as for hydrogen for ammonia production.
Start-up of the syngas plant is expected in 2005.
A final decision on the project is expected in 2002, pending NAGV verifying its gas reserves, receiving regulatory approval, obtaining further customer commitments, and being granted support from the Australian government regarding greenhouse gas emissions policies.
"Development of these substantial Timor Sea gas resources," said Jeff Schneider, Woodside director of Australian gas, "is an integral part of our plan to grow our gas business in Eastern Australia."
"Total investment in all segments of the project," said Wim Hein Grasso, Shell commercial director "including gas production, the subsea trunk line, onshore pipelines, the syngas plant, and other gas-consuming facilities could exceed $5 billion."