Liquefied Natural Gas Limited provided activities report for the quarter ended 31 December 2011.
• An EPC Services and Open Book Conversion Contract (EPCSOBC) was signed with China Huanqiu Contracting & Engineering Corporation (HQC) for the Company’s wholly owned LNG project at Fisherman’s Landing, in the Port of Gladstone, Queensland ;
• Six months extension of the Agreement for Lease, over the Fishermans Landing LNG Project site, was granted by Gladstone Ports Corporation Limited; and
• Increase of the Company’s shareholding in Metgasco Limited (MEL), from 8.99%, to 10.21%. The total market value of the Company’s investments in MEL and Oil Basins Limited (6.65%) is approximately $14 million.
Gladstone LNG Fisherman’s Landing Project
The Company plans to build, own and operate a 3 million tonnes per annum (mtpa) LNG plant at Fisherman’s Landing, in the Port of Gladstone, Queensland.
The Company had commenced construction of the LNG Project in October 2009, but in March 2010 suspended construction due to Arrow Energy Limited, the proposed gas supplier, being the subject of a corporate takeover by Shell and PetroChina.
LNG Limited expended ~$60 million in developing the LNG Project between early 2007 and March 2010.
The Company has relevant approvals to recommence construction as soon as gas supply is secured and the Company and its proposed partners achieve final investment decision.
Since July 2011, LNG Limited has been actively working with its major shareholder, HQC (a wholly owned subsidiary of China National Petroleum Corporation), to secure gas supply and recommence development of the LNG Project.
LNG Limited anticipates making significant progress in the securing of gas supply in the first half of 2012.
Gas Supply and Delivery Plan
LNG Limited has been actively progressing potential gas supply during the quarter to three gas hubs, being Wallumbilla, Callide and Ipswich.
Callide – Between 2013 and 2018, five new intersecting gas pipelines are planned to be in operation in Callide, some 21 kilometres from the LNG Project site at Fisherman’s Landing. The Company holds pipeline license PPL 116 to connect gas from Callide to Fisherman’s Landing and several gas suppliers are capable of supplying the Company with gas at Callide.
Wallumbilla – LNG Limited is focusing on several gas suppliers who are capable of supplying gas at Wallumbilla, near Roma in Queensland. After certain upgrades to the gas infrastructure this will allow for gas supply to Gladstone utilising the existing Queensland Gas Pipeline (QGP) owned and operated by Jemena. The QGP is the only existing operating pipeline to Gladstone that passes through Callide. This is an essential component of the LNG Project gas supply plan, in order to successfully achieve the Company’s target of gas supply in 2015, for the first LNG train of 1.5 mtpa guaranteed LNG production capacity. Subject to the availability of gas, the Company then plans a further gas infrastructure upgrade for a second LNG train.
Ipswich – In the longer term, gas supply may be available at Ipswich from companies such as Metgasco Limited. Gas supply at Ipswich may be swapped with gas supply at Wallumbilla or interconnected between Ipswich and WallumbillaLNG Limited has commenced an evaluation of the interconnection options.
LNG World News Staff, January 31, 2012