Partners QCLNG Train 1 (%)
Partners QCLNG Train 2 (%)
The QCLNG Project includes an initial two-train 8.5 mtpa liquefaction plant with potential for further expansion. The plant is being built on a 270 hectare site at North China Bay on Curtis Island, Gladstone, on the Queensland coast and first LNG for delivery is expected in 2014. The project also involves the construction of a 200 kilometre, 42 inch collection pipeline and a 340 kilometre, 42 inch trunkline to Gladstone and additional pipeline capacity to gather nearby CSG resources.
In 2008, the QCLNG Project was awarded ‘Significant Project Status’ by the Queensland government, which triggered environmental impact assessment under Queensland and Australian government legislation. In June 2010, BG Group received environmental approval from the Queensland state government for the QCLNG Project and in October 2010 received federal government approval.
In early 2010, BG Group announced it had signed plant engineering, procurement and construction contracts with Bechtel companies for the QCLNG liquefaction plant. Bechtel has been proceeding with engineering works and the procurement of plant long-lead items, including compressors and storage tanks. QGC began to procure long-lead items during the first half of 2010, valued at more than US$3 billion, for example a contract for the manufacture of 550 kilometres of 42 inch pipeline was placed with Howa Trading Co., Ltd, a subsidiary of Baoshan Iron & Steel Co., Ltd.
In October 2010, BG Group announced the final investment decision on QCLNG and investment of US$15 billion in the project from 2011 to 2014. The first stage involves two trains with nameplate production capacity of 8.5 mtpa. The Curtis Island site is permitted for three trains and has space for up to five and the Group is investigating the potential for a third train.
BG Group’s decision to sanction the development completed the final condition required for implementation of the Group’s agreements with CNOOC and binding agreements with Tokyo Gas followed in March 2011. BG Group has issued final notices to proceed to the main contractors which include: Bechtel Oil and Gas, Inc., for the engineering, procurement and construction of the liquefaction plant; WorleyParsons, for gas field facilities and infrastructure development; and MCJV (a joint venture between McConnell Dowell Constructors (Aust.) Pty Ltd and Consolidated Contractors Company), for the transmission pipeline network.
LNG marketing
In March 2010, BG Group signed a LNG sales contract with the China National Offshore Oil Corporation (CNOOC), concluding negotiations announced in May 2009. Under the terms of parallel agreements between BG Group and CNOOC:
- CNOOC will be supplied with 3.6 mtpa of LNG over a 20-year period with LNG manufactured at the QCLNG facility whichis planned to come onstream by 2014. BG Group may also supply CNOOC from the Group’s global LNG portfolio;
- CNOOC acquired a 5% equity interest in the reserves and resources of certain BG Group tenements in the Walloons Fairway of the Surat Basin in Queensland;
- CNOOC became a 10% equity investor in the first of the two liquefaction trains that will form the first phase of QCLNG development; and
- BG Group and CNOOC have agreed to participate jointly in a consortium to construct two LNG ships in China that will be owned by the consortium.
In March 2011, BG Group signed a sales agreement with Tokyo Gas Co., Ltd. (Tokyo Gas), concluding negotiations announced in March 2010. Under the agreement:
- Tokyo Gas will buy 1.2 mtpa of LNG for 20 years from 2015 which will be supplied from QCLNG and also from the Group’s global LNG portfolio;
- Tokyo Gas acquired a 1.25% interest in the reserves and resources of certain BG Group tenements in the Walloons Fairway; and
- Tokyo Gas became a 2.5% equity investor in the second of the two liquefaction trains.
These agreements represent the first fully termed sales agreement entered into by a Japanese company of LNG from coal seam gas.
BG Group has also signed a sales agreement with Chubu Electric Power Co. Inc, (Chubu Electric) concluding negotiations announced in October 2010 for the long-term supply of LNG. Under the agreement, Chubu Electric will purchase up to 122 cargoes over 21 years, starting in 2014. This will be supplied from BG Group’s global LNG portfolio, including QCLNG.
QCLNG is firmly underpinned by BG Group’s global LNG supply agreements. In total, BG Group has now secured up to 10 mtpa of long-term LNG sales to Chile, China, Japan and Singapore.
Condamine Power Station
BG Group also operates Condamine Power Station, which is fuelled by CSG produced at QGC’s gasfields in the Surat Basin. With a potential generating capacity of 140 MW, the station provides power to the National Electricity Market and reached full capacity (combined cycle) operation during 2010.