NEW GAS TRAIN COMES ONLINE AT CURTIS ISLAND

Written on the 10 October 2016

NEW GAS TRAIN COMES ONLINE AT CURTIS ISLAND AUSTRALIA Pacific LNG has produced the maiden cargo from the second if its two 4.5 million tonnes per annum production trains on Curtis Island near Gladstone.

In 2021, Australia will equal Qatar as the largest exporter of LNG in the world and the Curtis Island plant, which is a joint venture between Origin Energy, ConocoPhillips and Sinopec is a major player in Australia's newfound mantle as a global gas powerhouse.

Origin Integrated Gas Chief Executive, David Baldwin, described Australia Pacific LNG as one of the largest energy projects to be undertaken in eastern Australia and represents billions of dollars of investment in local jobs, regional communities and Queensland as a whole.

"With the commencement of Train 2 operations, approximately 200TJ/day of equity gas that was previously directed to the QGC sales contract will become available to Australia Pacific LNG," he says.

Australia Pacific LNG CEO, Page Maxson, said the second train had produced 150,000 cubic metres of LNG, equivalent to the volume required to fill an LNG ship.

"The second train is up and running, enabling our LNG Facility on Curtis Island to deliver commercial quantities of LNG at sustained output from both trains," says Maxson.

"As the largest producer of natural gas in eastern Australia, we are underpinned by a world-class coal seam gas resources position. We currently provide approximately 25 per cent of domestic gas to the east coast market, with sufficient reserves to meet both LNG and domestic demand."

The announcement comes on a day where oil prices dropped more than 1 per cent and the Tax Justice Network revealed that the Petroleum Resources Rent Tax would generate nowhere near the money that Qatar generates from its own royalty system.

Today's announcement from Origin (ASX:ORG) did little to excite investors - the company's share price has dropped 1.51 per cent to $5.535 per share.

Since Australia Pacific LNG's first train commenced operation in January, it has shipped 47 LNG cargoes and recently passed an important milestone.

"Pleasingly, Australia Pacific LNG recently completed the 120-day operational test period for its first production train. This represents a major milestone in satisfying project financing completion agreements for Train 1, which is expected to occur by the end of calendar 2016," says Origin Energy CEO Grant King.

Origin will see the benefits of production in its earnings from FY2018 and beyond and the company will focus on cutting costs from upstream production as it attempts to glean profits from the facility in an environment of low gas prices.

Australia Pacific LNG is one of three joint LNG facilities operating on Curtis Island alongside Queensland Curtis LNG, (BG Group and CNOOC), and Gladstone LNG (Santos, Petronas, Total, Kogas).

Western Australia has also seen a gas development boom and Chevron's 15 million tonne per annum Gorgon facility in northern Western Australia celebrated its first cargo in March this year.

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