Queensland’s booming gas industry has taken off in rapid succession creating global opportunities for the state and for Australia. Gladstone’s scale of production is without a doubt a close contender with the west, with the potential to produce 51.8 million tonnes per annum (MMt/a) of gas collectively when its largest projects are operational, turning an unconventional gamble into a viable industry.
Gas Today reviews Gladstone’s biggest projects to gain a better understanding.
Queensland Curtis LNG Project
BG Group subsidiary QGC is constructing an $A8 billion onshore coal seam gas (CSG)-to-LNG production and export facility on the Queensland coast, including an export pipeline from QGC’s Surat Basin tenements to a port site.Article continues below…
QGC plans to commission the first train in late 2013 and the second train approximately six to twelve months later.
The project also includes a 194 km gas collection header pipeline to collect gas from centralised compressor facilities for delivery to the 334 km export pipeline, a 12 km pipeline crossing The Narrows from the mainland to Curtis Island and a 13 km lateral. The pipeline will have a diameter of 1,067 mm. Mechanical completion is expected in 2012.
The supply of 190 petajoules per annum (PJ/a) of CSG to feed the project is to be sourced from QGC’s Surat Basin tenements. Up to 6,000 gas production wells are planned over the life of the project, including an initial 1,500 wells to be drilled across the gas fields by mid-2014.
Commissioning of LNG is planned to start in the third quarter of 2013 and LNG production to commence in 2014.
Gladstone LNG (GLNG) Project
Construction has commenced on Santos’ Gladstone LNG (GLNG) Project, located at Curtis Island, Gladstone, Queensland. The project includes a gas transmission pipeline linking a compression station at Santos’ Fairview and Roma CSG fields in the Surat Basin to the liquefaction plant. Gas will also be sourced from the Bowen Basin.
Supply contracts for the project include agreements with Petronas and KOGAS, each for 3.5 MMt/a of LNG.
The GLNG pipeline is expected to run parallel to Jemena’s Queensland Gas Pipeline route from the northern end of the Arcadia Valley to Gladstone. The pipeline will cross Port Curtis between Friend Point (on the mainland) and Laird Point (on Curtis Island), and will be trenched below the seabed then backfilled with sand and rock in order to avoid the risk of boat anchors damaging the pipe.
A second train at the liquefaction plant is expected to commence operation one year after the first GLNG train. A total gas supply of approximately 1,200 terajoules per day (TJ/d) will be required for the two LNG trains. Santos has also identified three other sites within the proposed GLNG precinct for the development of additional LNG trains. The site could contain up to five LNG trains if required.
Initial production is expected to be 3–4 MMt/a, with a maximum potential production of 10 MMt/a of LNG. First LNG exports are expected in 2015.
Australian Pacific LNG (APLNG) Project
The Australian Pacific LNG (APLNG) Project includes a plan to develop a CSG-to-LNG project utilising Origin Energy’s Queensland CSG reserves and resources.
Origin will act as the upstream CSG operator and ConocoPhillips will be the downstream LNG operator, with the joint venture company to market the LNG. In February 2011 Sinopec signed an LNG off take agreement under which it took a 15 per cent stake in the project. Origin and ConocoPhillips each hold a 42.5 per cent stake. The four trains to be constructed using Cascade technology are designed to have the capacity to produce up to 18 MMt/a of LNG. However in June 2011, Origin Energy announced that actual production of the project could be impacted if Tri-Star Petroleum exercises its reversion rights over certain CSG reserves, which Origin had planned to use to feed the project.
Queensland Curtis LNG (QCLNG)
The project includes the construction of a gas transmission pipeline from the Surat and Bowen basins to a proposed LNG processing site located at Laird Point on Curtis Island, Gladstone.
It will comprise two lateral pipelines, 44 km and 38 km in length, and 914.4 mm and 762 mm in diameter, connecting the Condabri and Woleebee developments, respectively, with the main pipeline.
Beginning east of Wandoan at the junction of the two lateral pipelines, the main pipeline extends 362 km to the north, veering east during the latter stages, with a marine crossing at The Narrows to arrive at the LNG facility. Existing easements will be used and the route deviated wherever possible to avoid impacts.
The pipeline may be co-located with other CSG pipelines for more than half its length, including the section gazetted by the Queensland Government within the Callide Infrastructure Corridor State Development Area and the Gladstone State Development Area.
An agreement has been reached with QCLNG proponents for the co-location of a pipeline crossing The Narrows, an area between the mainland and Curtis Island. Construction of the pipeline is expected to take approximately 18 months and is proposed to begin by mid-2012. The environmental impact statement has been approved by the Queensland and Federal governments. Front-end engineering and design (FEED) studies, early works and contract negotiations are well underway, preceding a final investment decision in 2011. First gas is expected in 2015.
Gladstone ‘Fisherman’s Landing’ LNG Project
LNG Limited has proposed a 3MMt/a single train LNG plant, along with associated infrastructure, at Fisherman’s Landing in Gladstone. Early site works, including civil works and deep soil mixing to prepare LNG tank foundations, have commenced at Fisherman’s Landing under an early works deed.
The exact nature of the gas supply for the project is currently being determined by LNG Limited. The company has signed a Memorandum of Understanding with Metgasco to jointly study the feasibility of a CSG-to-LNG project for its Fisherman’s Landing site.
The study will evaluate the viability of gas supply, transportation, liquefaction and sale of LNG from Metgasco’s 100 per cent-owned CSG reserves and conventional gas resources in the Clarence Moreton Basin of New South Wales to the Gladstone ‘Fisherman’s Landing’ LNG Project.
A FEED study has confirmed Jemena’s QGP can be expanded to transport gas for the Gladstone ‘Fisherman’s Landing’ LNG Project, from the Wallumbilla Gas Hub to the Callide Gas Hub in Gladstone, and the companies are proposing to negotiate a gas transportation agreement. LNG Limited has been granted state environmental approval to build a 21 km gas pipeline to run from the Callide Infrastructure Corridor to the project at the Port of Gladstone. LNG Limited is due to select a strategic partner for the project once a gas supply plan is officially finalised. The LNG train will be developed using LNG Limited’s optimised single-mixed refrigerant liquefaction technology under a technology licence and fee agreement. The train site and design will provide for an additional LNG train of 1.5 MMt/a, subject to the availability of further gas.
Prior LNG offtake agreements with Golar LNG have been terminated.
Arrow Energy LNG Project
Arrow Energy is planning to develop a CSG-to-LNG processing facility on Curtis Island, which will be supplied with CSG from Arrow’s reserves in the Surat and Bowen basins, in southeast and central Queensland. The Queensland Government has declared the project “significant” following the submission of an initial advice statement. The environmental impact statement is currently being prepared.
The project is expected to provide up to 3,000 jobs during construction, and up to 300 operational jobs. Arrow is proposing to develop the 467 km, 660 mm diameter Arrow Surat Pipeline and the 600 km Arrow Bowen Pipeline as part of the project. The dredging of Port Curtis and the Port of Gladstone will also assist the development of this project.
Arrow, which is owned by CS CSG Australia, a joint venture between Shell and PetroChina, plans to export first gas from its project in Gladstone in 2017. Tenders for FEED are now closed and preparation of the environmental impact statement is ongoing.