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In February 2008, BG Group announced an alliance with Queensland Gas Company Limited (QGC), a leading coal seam gas company supplying the Queensland market. BG Group acquired a 20% interest in QGC’s coal seam gas assets in the Surat Basin, south-west Queensland, and a 9.9% stake in QGC for a total consideration of £316 million. BG Group will also acquire a further 10% interest in such coal seam gas and other assets with the earlier of either the certification of proved and probable reserves of 7 000 petajoules (PJ) (c7 tcf) or the final investment decision approving the budget for the construction of a LNG export facility.
The companies are co-operating in the exploration and development of onshore coal seam gas acreage that will supply the domestic market and a new LNG production and export facility. BG Group’s alliance with QGC is pursuing a LNG facility on the central Queensland coast to supply Asia Pacific markets. The Queensland Curtis LNG project is being designed to initially supply
3-4 mtpa of LNG, with potential expansion up to 12 mtpa subject to additional gas reserves.
The LNG project involves the construction of a 380 kilometre pipeline to the port of Gladstone, additional pipeline capacity to link nearby CSG resources and development of the LNG terminal.
In July 2008, the LNG project was awarded ‘Significant Project Status’ by the Queensland Government, a move that triggers environmental impact assessment under Queensland and Australian Government legislation. Bechtel has been appointed to commence work on the FEED study.
In June 2008, QGC announced that its proved and probable (2P) reserves of coal seam gas in the QGC/BG Group assets increased from 1 317 PJ to
2 415 PJ. Proved, probable and possible (3P) reserves have risen from
3 116 PJ to 7 163 PJ.
In September 2008, QGC announced a further increase in 2P reserves to
2 703 PJ. 3P reserves stand at 7 103 PJ. The focus of drilling since the last upgrade has been on the development of 1P and 2P reserves.
Further information:
Queensland Curtis LNG website - www.qclng.com.au
Queensland Gas Company website – www.qgc.com.au