BG Group Approves Queensland LNG project

BG Group has approved the first phase of the Queensland Curtis Liquefied Natural Gas (QCLNG) project following Australian Federal and State Government environmental approvals.

Phase I covers the development of a two-train liquefaction plant on Curtis Island near Gladstone in Queensland, Australia, with associated upstream and pipeline facilities.

The liquefaction plant comprises two LNG trains with a total capacity of 8.5 million tonnes per annum (mtpa).

Between 2011 and 2014 BG Group plans to invest $15bn in developing the liquefaction plant and related wells, field facilities and pipelines with potential for a third LNG train.

First LNG exports are due to begin in 2014, with agreements already in place with Chile, China, Japan and Singapore for the purchase of up to 9.5mtpa.

With the approval the BG Group has also completed agreements with China National Offshore Oil Corporation (CNOOC) to buy 3.6mtpa of LNG to be used for 20 years from the time of start-up. It will also buy 5% of BG Group’s interests in tenements in the Walloons Fairway of the Surat Basin.

CNOOC will also jointly participate with BG Group in a consortium to construct two LNG ships in China and become a 10% equity investor in the first LNG train in the initial phase.

The decision to sanction the project also satisfies one of the conditions associated with the proposed agreements with Tokyo Gas.