Conditional Environmental Approval Granted by Government for Australia's Second Floating LNG Project

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Researched by Industrial Info Resources Australia (Sugar Land, Texas)--The Australian federal government has granted conditional environmental approval for the Bonaparte floating liquefied natural gas (LNG) project, which is owned by GDF Suez (Paris, France) and Santos (Adelaide, Australia).

The proposed floating LNG production platform will produce 2 million metric tons of liquefied natural gas per year, sourced via natural gas in the Petrel, Tern and Frigate fields of the Bonaparte Basin. The Bonaparte floating LNG project is currently in the pre-front-end engineering and design (FEED) phase, with FEED set to begin at the start of 2013 and carry through until the middle of 2014. A final investment decision will be made before the end of 2014. If environmental and financial approvals are granted on schedule, off-site fabrication and construction will start in 2014 or early 2015, with construction carried out over a four-year period. Australia could be celebrating the start-up of its second floating LNG platform at the end of 2018.

The 3.6 million-metric-ton-per-year Prelude FLNG project is under construction and on schedule for first LNG exports in 2017. The Prelude project is 100% owned by Royal Dutch Shell (NYSE:RDS.A) (The Hague, Netherlands), and is the first of many that Shell plans to have built by joint venture Samsung Heavy Industries (Seoul, South Korea) and Technip S.A. (Paris, France).

The exciting new technology of floating LNG production plants enables liquefaction to take place onboard a vessel, permanently moored out to sea directly over conventional natural gas fields, ready for export via LNG cargo carriers direct from its offshore location to the LNG buyer.

The benefits of Floating LNG production over onshore, land-based LNG production plants affect the environment, society and the commercial entities in ownership of these projects. Smaller gas fields that have previously been deemed commercially unviable due to their distance from land become more appealing with the option of floating LNG. Costs are decreased substantially when the need to build a main export pipeline subsea between the offshore gas fields and land-based infrastructure are removed. The social and physical environment on land is affected to a much lesser degree. The marine environment and air quality are the primary issues environmental authorities need to consider.

Australia's Federal Environment Minister, Tony Burke, has placed 15 strict conditions on the Bonaparte project with the aim of mitigating damage to the marine environment and to threatened and migratory species. It will be necessary for GDF Suez (as project operator) to implement numerous management plans throughout the development phases for submittal to the Environment Minister for approval. This includes an Operational Phase Environment Plan, which must be submitted for my approval. The plan will cover the management of discharges and minimize impacts on the marine environment.

"The proponent will also need to implement procedures minimizing impacts on whales and dolphins, including applying a 500-meter caution zone between whales and vessels to reduce potential impacts, such as a vessel strike," Burke said.

"Importantly, the proponent will be required to adhere to all relevant measures to address the risk of a spill, including capacity to respond to a spill to protect the matters of national environmental significance."

The large-scale, land-based LNG production plants, which are under construction in Australia, have received an average of 25 conditions placed upon project operators by the federal government. Australia's first floating LNG project, Prelude, had 13 conditions; floating LNG projects in Australia therefore "get off lightly" in comparison to land-based counterparts.

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