Australasian Mining Review

Australasian Mining Review Summer 2011

Australasian Mining Review

Issue link: http://ebook.aprs.com.au/i/26056

Contents of this Issue

Navigation

Page 46 of 151

43 [Oil and gas review] The project is projected to boost Queensland’s gross state product by up to $32 billion between 2010 and 2021, adding $4 billion a year to Queensland exports. It will also generate 5,000 jobs during construction and 1,000 jobs during its operation from 2014. “The plant will be half the size of the whole [Western Australian] North West Shelf project and that will go in place in four years,” Federal Treasurer Wayne Swan was quoted saying. “The North West Shelf was put in place over 20 years and it will produce a third of Australia’s LNG, and that’s just stage one.” Yet LNG project approvals have been subject to increasing bureaucratic scrutiny, slowing the investment decision-making process for their major corporate backers. The third major LNG project touted for Gladstone, Australia Pacific LNG (APLNG), failed to achieve its goal of reaching a FID by the end of 2010 due to government delays. The fifty-fifty joint venture between Origin Energy and US major ConocoPhillips was planning a two-train, 14-15 mtpa project on Curtis Island, with first production slated for 2014. After announcing plans to secure offtake agreements and FID by year-end, on December 21, Federal Environment Minister Tony Burke postponed his decision on the project’s approval to February 22, citing the need for further information. The project had already received Queensland government environmental approval. Nevertheless, a slate of LNG projects remain planned for Gladstone. Another advanced project is the Shell and PetroChina project (originally proposed by Arrow Energy), which in December invited tenders for initial design and engineering work. Targeting FID in 2012, the project will include the construction of up to four trains on Curtis Island. Other projects include those proposed by LNG Limited, Japan’s Sojitz Corporation and Impel. Queensland’s position as Australia’s largest holder of onshore CSG reserves has driven the industry’s growth, with sufficient reserves to power the state reportedly for 500 years. Flood damage Industry observer and environmental lawyer Tim Hanmore described the recent FID decisions as an enormous “shot in the arm” for the Queensland and Australian economy. “The January floods have had an enormous impact on the Queensland CSG/LNG industry, and these decisions by the energy majors to push ahead with their projects is key to reviving the local economy,” said Hanmore, special counsel at McCullough Robertson Lawyers. Heavy rains in central Queensland during the latter end of 2010 had already disrupted the exploration activities of companies such as Bow Energy, but the January 2011 floods took the crisis right to the companies’ head offices. More than 75 per cent of the state was declared a disaster zone, with drilling in the Surat and Bowen Basins effectively halted and corporate headquarters in Brisbane shut down. Origin Energy reported to PetroleumNews that only 12 of its 300 producing wells had been inundated with floodwaters, while one of Canadian drilling and well servicing company Savanna Energy’s drilling rigs employed on the APLNG project was extensively damaged. However, Santos along with BG and Arrow Energy reported only limited impact on their CSG production, with the flooding hampering access to well sites and rigs. Bow Energy also reported only minimal damage to infrastructure, but recognised the broader community impact of the crisis. Australasian Mining Review 2011: issue 2.1

Articles in this issue

Archives of this issue

view archives of Australasian Mining Review - Australasian Mining Review Summer 2011