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First LNG project supplied by CSG: Santos Gladstone LNG forecast to produce 3-4mt LNG/yr from Curtis Island; ‘major project’ status allocated

Posted by gasweek on 15 September, 2007

Gladstone LNG, due for final investment go-ahead towards the end of 2009 and first production early in 2014, will be the first LNG project supplied by coal-seam gas, which will come from Santos’s huge resource in central Queensland, reported The Australian Financial Review (20/7/2007, p.68). The Queensland Government has given Gladstone LNG major project status, which will help ease regulatory hurdles, and Central Queensland Ports Corp agreed to provide Santos a site on Curtis Island.

Major advantages: John Ellice-Flint conceded it may take time for analysts and investors to get used to the idea of exporting coal seam gas, but insisted there were major advantages, including development costs. “Anything onshore is going to be cheaper than anything offshore.” Gladstone LNG was forecast to produce between 3 and 4 million tonnes of LNG a year, requiring between 170 and 220 petajoules of gas a year. Analysts said Santos will have to manage the ramp-up of production from the 500 wells it planned to drill during the five-year development of Gladstone LNG, but it will be able to shut-in some of its conventional gas output to match domestic supply and demand in the meantime.

Gladstone costs less: Ellice-Flint said Gladstone was a cheaper place to build an LNG project than either Darwin or the North-West Shelf because it had existing infrastructure and a large number of experienced workers. Between 200 and 300 of the workers who built Darwin LNG, for example, lived in Gladstone. “If you compare the access to skills and facilities in Gladstone, you cannot compare them with northern Australia or Western Australia,” he said. “You’ve got rail, you’ve got power, you’ve got people that are used to building large construction projects. Deepwater ports [like Gladstone’s] are critical in LNG.”

The Australian Financial Review, 20/7/2007, p. 68

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