ENVIRONMENTAL CONCERNS STOP QGC PROJECT

Written on the 23 March 2011

ENVIRONMENTAL CONCERNS STOP QGC PROJECT

QGC (Queensland Gas Corporation) has stopped work on its major pipeline between the Surat Basin Gas fields and Gladstone due to environmental breaches.

Plans for soil and species management are yet to be approved on the project, which is part of a large scale LNG infrastructure plan and a $15 billion investment by QGC’s owner BG Group in the UK.

QGC senior vice president Jim Knudsen says the company was made aware on March 16 that a lack of approved plans might breach environmental conditions.

The company has ordered its contractor MCJV to stop work pending a compliance review.

“QGC yesterday advised Queensland and Commonwealth Government regulators of the potential breaches and that we had stopped work until we meet all of our obligations,” says Knudsen.

“We became aware of potential breaches during an internal review after the contractor began clearing a six kilometer by 40 meter right-of-way for construction of a section of pipeline near Dalby.

“We don’t believe the clearing has had an adverse impact on protected plants and animals and the potential breaches don’t affect the safety of people.”

Knudsen says work wouldn’t resume until conditions were met and the company would co-operate fully with regulators.

“We have stopped work because we’re committed to doing the right thing and we take seriously, our obligations to meet more than 1500 state and federal conditions on the Queensland Curtis LNG Project,” he says.

QGC doesn’t expect a material impact on project schedule and the suspended pipeline work is unrelated to the connection of five wells to an underground pipeline system about 24 kilometers north of Tara.

A QGC spokesperson estimates it will take at least two weeks to investigate why the plans weren’t approved in time.

“We believe the contractor had the proper plans in place, it was simply that the environmental plans and procedures hadn’t caught up with the clearing work – clearing the ground in preparation for laying the pipeline basically,” says the spokesperson.

“The plans are supposed to demonstrate that we have plans in place to manage protected species and we believe the work itself has been done in accordance with environmental plans, the plans just hadn’t caught up with the clearing work.

“There are potential penalties for breaching environmental conditions which can range from a fine of a few thousand dollars and upwards depending on the breach, but at this point, we’re working with the Commonwealth regulators.”

QGC recently signed an agreement under the BG Group umbrella to supply Tokyo Gas with 1.2 million metric tonnes a year of Liquefied Natural Gas (LNG) for 20 years, starting from 2015.

Under the agreement, Tokyo Gas will be supplied with LNG from the Queensland Curtis LNG facility on Curtis Island, near Gladstone in Queensland and from the company’s global LNG portfolio.

The agreement is the first fully termed sales agreement for supply to Japan of LNG sourced from coal seam gas – Japan is the world’s largest importer of LNG.

In addition to the LNG sale, Tokyo Gas will acquire a 1.25 per cent equity interest in the reserve and resources of certain BG Group tenements in the Walloons Fairway of the Surat Basin in Queensland.

QGC managing director Catherine Tanna (pictured), says the recent $15 billion investment commitment by BG Group was the largest to be undertaken by the group.

“Over the next four years, the project will create an estimated 5000 construction jobs and, from 2014, nearly 1000 jobs in operations,” she says.

“We estimate that the project will increase economic activity in Queensland by $32 billion over the project’s first decade, or $2.6 billion a year.”

Protesters have been fighting to save their land and homes from further mining in the region with human blockades at Tara and its ‘Don't gas Tara’ campaign.


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