$16 BILLION LNG PROJECT APPROVED
Written on the 3 March 2011
A NEWLY-approved $16 billion investment in Queensland's LNG industry will ensure the State’s future prosperity and aid in the recovery from the flood crisis, says Premier Anna Bligh.
Gladstone LNG (GLNG) today sanctioned the joint-venture project which will see construction on a 420 km gas pipeline from Roma to Gladstone commence this year.
A new production plant on Curtis Island will facilitate the off-take of LNG, providing GLNG and partners Santos, Petronas, Total and KOGAS with an essential gas export hub.
Bligh welcomed the announcement, saying the project will create around 5000 construction jobs plus a permanent workforce of around 1000.
“This project worth about $120 billion in exports over 20 years, and others like it, will inject billions into the Queensland and regional economies,” says Bligh.
“The millions of dollars in state royalties this project will generate will help bolster the State's economic recovery after the devastating floods.
“At times like this we need to be able to look to the future with hope and optimism and the LNG industry will play an important part in our State's recovery from this flood crisis.”
The Gold Coast's Icon Energy is one gas exploration company expected to benefit from the investment. Company secretary and general counsel Wesley Glanville says the investment 'puts Queensland's coal seam gas industry on the map'.
"This is a major industry development. Once the three significant project proposals in Central Queensland are underway, the state's CSG sector will be among the largest in the world," he says.
GLNG has been one of Queensland’s most active resources companies, having invested more than $1 billion into the State, including more than $440 million with Queensland suppliers in 2009 alone.
Treasurer and Minister for Employment and Economic Development Andrew Fraser, says the investment decision further highlights that Queensland's LNG industry was now ‘well and truly up and running’.
“The LNG industry will be a powerful ally that will help diversify Queensland's economy as well as creating a world-first and innovative industry that combines new science and technologies with age-old resource development,” he says.
“The (GLNG) project is a massive boost for local engineering, manufacturing and other supply companies from the Surat region through to Gladstone, that will be looking to tender for work.
“The indirect benefit to service and other industries securing contracts will create even more jobs and wealth within the community.
"Even in these tough times, the announcement of this multi-billion dollar project is proof that major corporations have faith in the State's future, in which the LNG industry will play a big role."
GLNG is expected to export LNG from 2015 with a capacity of 7.8 million tonnes per annum and the project also brings together some of the world's largest gas companies.
Queensland Gas Company (QGC), owned by global giant British Gas, is the major stakeholder in the Curtis Island plant project.
QGC managing director Catherine Tanna says the investment commitment is the largest ever undertaken by BG.
“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,” she says.
“Over the next four years, we will build the world’s first liquefied natural gas plan to use coal seam gas as a feedstock.”
Tanna says the plant will generate 35 per cent less greenhouse gas emissions than other fossil fuels, with project approvals that include around 1500 conditions.
“We are determined to co-exist with our neighbours – farmers, townspeople, miners, conservationists, traditional custodians, business, and governments,” she says.
The approval comes as welcome news for Brisbane's gas explorers as floods continue to wreak havoc throughout Queensland’s key mining areas.
Companies such as Xstrata and Arrow Energy are facing millions of dollars in lost production and damaged equipment at sites in the Bowen Basin while miners in the Surat Basin near Chinchilla are also bracing for big losses.