BG Group to Expand Upcoming Curtis LNG Plant to 8.5 Million Tons

---

Researched by Industrial Info Resources (Sugar Land, Texas)--BG Group plc (OTC:BRGYY) (Reading, England) recently announced plans to augment the planned annual production capacity of its upcoming liquefied natural gas (LNG) project on Curtis Island in Queensland, Australia, from 7.4 million tons to 8.5 million tons. The firm is expected to take a final investment decision on the project in mid-2010. The total cost of the project is estimated to be $6.9 billion.

In February 2008, BG Group forayed into Australia through an alliance with leading local explorer and producer of coal seam gas (CSG), Queensland Gas Company Limited (QGC) (Brisbane, Australia), to develop CSG fields and construct an LNG liquefaction facility in the state. BG Group acquired a 9.9% stake in QGC and a 20% stake in the firm's CSG assets in the Surat Basin in the southern region of Queensland for £316 million (US$493.3 million).

Following its acquisition of QGC for £2.2 billion (US$3.43 billion) in March 2009, BG Group added 11 trillion cubic feet of CSG reserves to its portfolio. In May of last year, BG Group completed an all-cash acquisition of Pure Energy Resources Limited (South Perth, Australia) for £464 million (US$724.5 million) and gained access to an additional 2 trillion cubic feet of CSG reserves. BG Group currently has access to 17.3 trillion cubic feet of CSG reserves.

CSG occurs naturally within coal deposits and is stored as a thin film on the surface of coal. The pressure of water filling the coal seams helps retain CSG within the deposits. CSG is usually composed of about 95% to 97% methane, which is also the principal constituent of natural gas. However, unlike natural gas deposits, most CSG reserves contain very little carbon dioxide, which makes it a suitable, environmentally friendly alternative to natural gas in applications such as cooking, heating, electricity generation and other industrial uses.

According to initial plans, the LNG liquefaction plant was to comprise two trains with a total annual capacity of 7.4 million tons, expandable to 12 million tons. The project will be developed on a 270-hectare area at North China Bay on Curtis Island and will also entail a 380-kilometer underground pipeline connecting the LNG plant to QGC's CSG acreage in Surat Basin, as well as additional pipeline linkages to other CSG resources nearby.

Frank Chapman, CEO of BG Group, said that the firm has the expertise, capital and gas resources to execute the project independently, but would consider partnering with other companies to develop infrastructure that could be shared, such as the pipeline to Gladstone.

The facility is scheduled to go on stream in 2014, and production is expected to total 480 billion cubic feet (80 million barrels of oil equivalent) in 2015. BG Group has already signed contracts with customers in China, Singapore and Chile to supply 8.3 million tons per year of LNG from the Curtis facility.

Earlier this month, BG Group announced plans to award contracts worth $3 billion for the LNG project in the first half of this year. Bechtel Group Incorporated (San Francisco, California) has secured the engineering, procurement and construction contract for the project, and will begin to place orders for long-lead equipment such as storage tanks and compressors. BG Group also said that it would start to place orders for equipment and materials for development of the gas fields and the connecting pipeline.

View Project Report - 86000854 86000964 86000966 86000870 200003236 200003430

Industrial Info Resources (IIR) is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy related markets. For more than 26 years, Industrial Info has provided plant and project spending opportunity databases, market forecasts, high resolution maps, and daily industry news.