Queensland Provides LNG Production and Export Opportunities

---

Researched by Industrial Info Resources (Sugar Land, Texas)--Coal Seam Gas (CSG), also known as coal bed methane, is a growing industry in Queensland and is set to become a major contributor to Australia's increased trade of liquefied natural gas (LNG) to the Asian market.

Five Grassroot LNG production plants will be constructed in Gladstone, as well as the dredging of Gladstone Harbour. Across the channel on the 6,000-hectacre Curtis Island, four LNG projects are proposed. The Queensland government has vowed to limit development on the island to ensure that 75% of the island will remain a protected Environmental Management Precinct. The Industrial Precinct runs along the south end of Curtis Island, stretching from Hamilton Point to Laird Point. The four LNG plants are proposed to be situated in this area of Curtis Island. The Asia Pacific LNG (APLNG) project will be near Laird Point. Arrow Energy LNG and GLNG will be nearer Hamilton Point, along with common user port infrastructure and dredging to allow carriers to enter the port. QCLNG will be constructed near China Bay, directly across the channel from the Fisherman's Landing project in Gladstone.

The Gladstone Fisherman's Landing project, which has civil construction ready to begin on one train, will be a 1.5 million-ton-per-year LNG production plant. Phase II will include construction of a second 1.5 million-ton-per-year train. LNG Limited (ASX:LNG) (Perth, Australia) is the owner and developer of the LNG production plant. There is no guarantee of when this project will go ahead, because of LNG Limited's need for a partner. Metgasco (ASX:MEL) entered a memorandum of understanding with LNG Limited to conduct a feasibility analysis to supply, transport, liquefy and sell natural gas from the companies CSG reserves in the Clarence Moreton Basin, New South Wales. The remaining four projects will utilise reserves from the Bowen and Surat Basins in Queensland.

The largest of the projects will be ConocoPhillips' (NYSE:COP) (Houston, Texas) and Origin Energy's (ASX:ORG) (Sydney, Australia) four-train, 18 million-ton-per-year (APLNG) project. The Arrow Energy LNG project will be a four-train, 16 million-ton-per-year production plant. The Queensland Curtis LNG (QCLNG) project is initially a two-train LNG plant with a capacity of 8.5 million tons per year. An eventual third train would boost capacity to 12 million tons per year. GLNG is operated by Santos Limited (ASX:STO), which also owns the project along with Petronas Gas Bhd (Kuala Lumpur, Malaysia) and Total (NYSE:TOT) (Paris, France).

The QCLNG and GLNG projects have only recently been granted environmental approval, after a lengthy approval process impacted by the change in Australian government. Tony Burke, the new Minister for Sustainability, Environment, Water, Population and Communities considered the viability of the projects at length, following successor Peter Garrett's decision to extend the approval process.

Queenslanders have mixed opinions about the CSG-to-LNG projects. Areas with low populations and limited industries, such as Chinchilla and Dalby, now have increased employment opportunities for residents, and the long term effect will be a major growth in the state's economy. However, the negative aspects are a hot topic of conversation, especially for farmers and conservationists concerned about the effect that the CSG industry will have on farming and the environment.

The major environmental concern of the CSG-to-LNG projects is the high level of salinity in the wastewater, the damage it can do to farmland, and the relatively unknown impacts of removal of groundwater. Farmers have concerns about soil erosion, land degradation and the quality of groundwater, as well as the loss of aesthetic appeal to farming regions when pipelines are constructed.

The Great Barrier Reef is a treasured natural wonder in Queensland that stretches all the way from Bundaberg to Cairns. Dredging, water contamination, increased shipping thoroughfare may be a threat to the reef and the possibility of contaminated water reaching the reef are additional concerns that have been expressed by conservation experts.

Earlier this month, it was announced that chemicals that are found in petrol and oil under the banner name of BTEX (benzene, toluene, ethyl benzene and xylene) were found in 17 of Origin Energy's exploration wells. These wells, situated in the Western Downs region in the Surat Basin will supply the APLNG project. It is thought that perhaps fluids leaked during the drilling process, causing the chemicals to taint the water at the wellhead. An immediate shutdown was announced, and questions were raised as to whether the federal government would allow the GLNG and QCLNG projects to go ahead.

Vigilant analysis of the content of the brackish wastewater will continue to prevail, as well as growth in infrastructure of wastewater treatment plants in order to make the water fit for reuse. The aim is that treated water will be used for irrigation, coal washing, dust suppression and livestock watering. There has even been talks of developing fish farms, as barramundi and mulloway are species of fish fit for human consumption when farmed in ameliorated CSG water.

View Plant Profile - 1077887 1083501 3007124 1079376 1077365
View Project Report - 86000870 200003556 200003236 200003430 86000975 86000976 86000979 300012767 86000967 86000965 86000854 86000964 86000966

Industrial Info Resources (IIR) is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. IIR's quality-assurance philosophy, the Living Forward Reporting Principle™, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities.