Coal Seam Gas

Blog migration

2011-08-16T21:53:00.000-07:00

Hi everyone

We have decided to consolidate this Coal Seam Gas blog into the IIR Gas Series umbrella.

All new posts will be posted in the new IIR Gas Series' blog (under the Gas & Petroleum category) and this blog will no longer be updated.

Many thanks for your readership and support on this blog through the years.

We looking forward to your continuing readership at our new blog home.

Thank you.
IIR's CSG team

Santos earmarks A$500m for NSW drilling programme

2011-08-10T16:06:00.005-07:00

Gas major Santos would spend around A$500-million over the next three years in drilling for coal seam gas in New South Wales, following the proposed acquisition of Eastern Star Gas.

Speaking to the American Chamber of Commerce in Australia on Thursday, Santos CEO and MD David Knox said that the company had so far drilled around 25 wells over the last three years in seeking to prove the extent of the gas available for future development in New South Wales.

“Over the next three years, upon completing our proposed acquisition of Eastern Star Gas, we will drill an additional 50 wells, and invest about A$500-million in doing so.”

Knox said that looking beyond that, Santos’ investment could be “much more significant”, adding that even if the development of the coal seam gas business in New South Wales was a third of the size of its Queensland project, around A$2-billion would be added to the New South Wales state revenues, and over 1 000 direct jobs would be created.

“Of course, the knock-on effects of this investment would create thousands of additional jobs within the community and other industries,” he added.

Santos launched a A$924-million takeover offer for fellow-listed Eastern Star Gas last month, in a move to gain 80% ownership of its coal seam gas permits in the Gunnedah basin, in New South Wales.

The acquisition of Eastern Star Gas would be conducted through a recommended scheme of arrangement, under which Eastern Star Gas shareholders would receive 0.068 Santos shares for every Eastern Star Gas share.

Knox said at the time that the acquisition of Eastern Star Gas was a “unique opportunity” to consolidate the company’s Gunnedah basin interests and establish a leading position in Australia’s next major natural gas province.

5 August 2011
miningweekly.com

Gladstone to hear Pilbara LNG lessons

2011-08-10T16:06:00.003-07:00

A Western Australian councillor is warning Gladstone in central Queensland to be well prepared for massive liquefied natural gas (LNG) growth and not make the same mistakes as in Karratha.

Cr John Lally, from the Shire of Roebourne in north-west Western Australia, will discuss the rapid growth in the Pilbara and its impacts at an industry conference in Gladstone today.

There are several multi-billion dollar gas projects in WA.

Cr Lally says there are lessons to be learnt.

"The companies are very focused on getting their projects up and if the town's not ready for it, they still keep moving," he said.

"So what's happened here is our rents are four times the national average, it means that people can't afford to live here and the Government has to act, there's also this time lag of two or three years to get things up and running."

9 August, 2011
ABC News

Ezion in $55M Gladstone win

2011-08-10T16:06:00.001-07:00

OFFSHORE logistics company Ezion Holdings has snagged a $US55 million ($A54.1 million) contract to provide full logistics and support services for the haulage of equipment and modules for an LNG project on Curtis Island.

While the LNG project was not disclosed, the company said it was among the first of the eight proposed LNG facilities in Queensland and was expected to have an initial capacity of 7.6 million tonnes per annum.

EnergyNewsBulletin believes the contract could be for Santos’ Gladstone LNG project, which will initially produce 7.8MMtpa.

Enzion has a similar role on the Gorgon project and said it was vital to grab a foothold in the Queensland LNG scene.

Ezion chief executive Thiam Keng said the potential for more contract wins was on the cards in the state, where the government expects 50 million tonnes per year of LNG could be produced from gas in the Surat and Bowen basins.

“We are deeply privileged to be able to participate in the important project on Curtis Island,” he said.

“We are confident that we can draw on our experience on Gorgon to make this project a big success. With the proven track record and economies of scale, we will work towards also supporting the other LNG projects in Queensland and other parts of Australia.”

Tuesday, 9 August 2011
energynewspremium.net

Sinopec official APLNG partner

2011-08-10T16:05:00.000-07:00

SINOPEC has officially become the Australia Pacific LNG joint venture’s partner and foundation customer after all conditions for the 4.3 million tonne per annum offtake deal were met.

APLNG partner Origin Energy said the agreement for Sinopec’s acquisition of a 15% ownership interest in the project was completed today, while all the conditions for the sale of 4.3MMtpa to the Chinese major had also been met.

The APLNG JV signed the binding offtake agreement with Sinopec in April. Along with taking 4.3MMtpa of LNG starting in 2015, Sinopec will pay $US1.5 billion for a 15% stake in the project.

The investment reduces Origin’s and ConocoPhillips’ stakes in the project to 42.5% each and also reduces the funding requirements by the two companies by $US1.765 billion.

The APLNG JV made a final investment decision on the first phase of the two train Australia Pacific LNG project last month.
The $US14 billion first phase of the project initiates the development of the first 4.5MMtpa LNG train with infrastructure to support a second train. The offtake deal with Sinopec underpins the first train.

The full two train project will have a capacity of 9MMtpa and cost $US20 billion, including $2.5 billion for contingencies ($1.7 billion for the first train).

Tuesday, 9 August 2011
energynewspremium.net

Gladstone booms

2011-06-14T21:16:00.003-07:00

GLADSTONE port is not only the largest multi-commodity facility in Queensland, it is also the fourth-largest coal export terminal in the world, handling over 50 million tonnes of coal per annum.

The port has already undergone expansion recently, with a new berth added to the RG Tanna coal terminal. There is also a $3.7 billion proposal for a new coal export facility nearby at Wiggins Island.

But now with an estimated $66 billion of coal seam gas to liquefied natural gas projects in Queensland having received the federal nod in the past six months, the race to get additional infrastructure to facilitate LNG exports is just gathering steam.

The LNG projects that have received federal approval include Santos’ Gladstone LNG project, BG Group’s Queensland Curtis LNG project and the Origin/Conoco joint venture. Additionally, there are projects such as Shell/Petronas, LNG Ltd’s Fishermans Landing and LNG Impel’s Southern Cross also in the pipeline.

With the first LNG cargoes expected in early 2014, getting construction started has become a priority. Leading the charge is the Gladstone Ports Corporation, a government body that functions as a terminal operator as well as leasing land to resources project proponents for constructing additional infrastructure.

“GPC has allocated extensive areas of strategic port land to accommodate the LNG proponents,” GPC acting chief executive officer Mike Galt said in an email.

“The land allocated to LNG will include parking for LNG employees, the storage of the pipeline, the construction of temporary wharf facilities to load personnel in the Barney Point area and temporary wharf facilities at RG Tanna Coal Terminal area to load out resources and aggregate.”

Galt said GPC had also allocated land for LNG Ltd’s Fishermans Landing project to load out its resources and personnel.

GPC is undertaking two large expansion efforts – land reclamation at Fishermans Landing and a $1.3 billion Western Basin Dredging and Disposal Project that will clear the way for ship traffic for LNG exports.

A $387 million first stage dredging contract was commissioned in early April and awarded to a joint venture of Van Oord Australia and Dredging International, an offshoot of Dredging, Environmental and Marine Engineering Group of Belgium.

Work will include dredging to 7.5 metres depth in a 3.5 kilometre channel and dredging several berthing terminals. The first stage of dredging works is aimed to facilitate loading of materials in Curtis Island and for early construction of LNG jetty. Work on the first stage is expected to be finished in July 2012.

The seven-stage dredging and disposal project involves deepening and widening existing channels and creating additional channels over a 20-year period. The exact scope of future development will depend on shipping traffic requirements and how the LNG sector develops.

The dredging and disposal work also incorporates the planned Fishermans Landing Northern expansion project, for which Abigroup recently got the contract to construct a bund and haul road. Once the bund is constructed, 150 hectares of land will be reclaimed and six new wharves will be built. The project is expected to cost $200 million.

While the upstream and midstream EPC contracts for the different projects have been awarded to different companies including Fluor, Worley Parsons and Foster Wheeler, Bechtel has won the lion’s share of the downstream contracts.

Downstream engineering procurement and construction contracts being handled by Bechtel include building LNG jetties for both the GLNG and QCLNG.

The US company recently awarded a $150 million contract to Leighton subsidiary John Holland to design and construct a new ferry berth, roll on/roll off berth, load on/load off berth and bulk aggregate unloading berth. Construction is expected to be completed by the middle of next year.

An industry source said since all three projects were following Conoco’s proprietary Cascade technology for downstream gas processing and Bechtel had an exclusive user license agreement with Conoco, it had always been the front-runner.

A Bechtel spokesperson declined to comment for this article, but EnergyNewsPremium’s sister publication Contractor understands it will put about 19 works packages up for grabs for the Gladstone LNG project, including a marine terminal building.

The QCLNG project has 13 works packages downstream including civil works and marine facilities. It is also understood that talks are underway to secure marine transport vessels including dredges and two roll on/roll off vessels that will be deployed on a 60 month contract.

All the planned infrastructure expansion is not without woes or controversy.

The dredging work has already come under scrutiny by environmentalists, who contend that the project could threaten the already endangered dugongs.

However, project sponsors say the environmental plan for the dredging project calls for securing additional onshore areas for conservation. But with three mega projects beginning the construction phase, industry and government sources say there are more than just environmental constraints.

“There is a range of pressure on skills and labour; [LNG project proponents] are not only competing with projects in WA, but amongst themselves,” Gladstone Economic Development Board chief executive Ken King said.

King said that with Bechtel expected to manage at least three downstream projects, “the whole supply chain … becomes an issue”.

That issue is already being felt. An industry source familiar with the situation said that with Bechtel already committing teams to both the Gladstone LNG and the QCLNG projects, it was struggling to provide skilled workers for the Conoco project.

Understandably, that has become a sore point. It could even prompt Conoco to open up the gas processing technology license to third parties.

King said the pressure was exacerbated by other conditions that came with the project approvals.

“There is not only project infrastructure but also social infrastructure that needs to be completed and there is a degree of pressure,” he said.

Wednesday, 8 June 2011
energynewspremium.net
http://www.energynewspremium.net/StoryView.asp?StoryID=2392545

Origin reels in a hybrid

2011-06-14T21:16:00.001-07:00

ORIGIN Energy has successfully placed a €500 million ($A680 million) hybrid issue as it seeks to raise cash for the Australia Pacific LNG project.

The hybrid issue will receive 100% equity credit from Standard & Poors and 50% equity credit from Moody’s for ratings purposes, supporting Origin’s BBB+/Baa1 credit ratings, although Moody’s assigned a Baa3 rating to the hybrid issue.

Origin’s executive director of finance and strategy Karen Moses said the company’s recent financial deals, including a $2.3 billion equity raising and the syndication of a bank debt facility earlier this year, pointed to great confidence in the company.

“Origin has historically enjoyed strong support from investors across both debt and equity markets,” she said.

“We continue to assess a range op options in relation to the funding requirements for the Australia Pacific LNG project. The hybrid proceeds strengthen Origin’s balance sheet ahead of our contribution to the project.”

The company said it continued to make solid progress towards a final investment decision, expected by year’s end.

The hybrid security is Euro-monetised and hedged into US dollars and matures after 60 years.

It includes a mandatory deferral of interest for up to five years if Origin’s long-term corporate credit rating falls to BB+ or below.

Friday, 10 June 2011
energynewspremium.net
http://www.energynewspremium.net/StoryView.asp?StoryID=2392719

QGC talks up local content

2011-06-14T21:11:00.000-07:00

QGC says 75% of the $2.3 billion its has spent on its Queensland Curtis liquefied natural gas project and related business has been spent in Australia so far.

In its first six-monthly report to the Queensland Coordinator-General on Australian industry participation for QCLNG, the company said $1.3 billion of that had been spent in Queensland.

“By 2014, we expect about half of our expenditure on the LNG project to be spent in Australia and nearly 80% of expenditure over the project life to be spent in Australia,” QGC senior vice-president Jim Knudsen said.

He said QGC currently had more than 550 contracts across its business for services and equipment that included piping, generators, freight, bus, barge and crane hire, fuel, concrete batching, steel tanks, fencing, engineering services, electrical work, camp services and stevedoring.

“More than 1500 businesses have registered their interest in being involved in the project and nearly 2000 company representatives have attended briefings to learn about the project,” he said.

“Time and time again we hear stories about small family businesses in our host communities growing and prospering – it’s a busy time for all of us.”

QGC added that about 96% of the nearly 3600 people working on QCLNG and its related business were Australians, with Knudsen saying the company had more than 200 vacancies for a wide range of roles.

He said QGC and its contractors employed 92 graduates and apprentices as at March 31, 2011, while 1773 people had completed short-course training across 20 skills areas.

“QGC has also spent more than $39 million in research and development since establishing its business in Queensland, specifically in water management, drilling techniques, gas and LNG technology, pipeline transport and environment,” he added.

Friday, 10 June 2011
energynewspremium.net
http://www.energynewspremium.net/StoryView.asp?StoryID=2392733

BG firms up Tokyo Gas QCLNG deal

2011-03-16T15:04:00.001-07:00

BG Group has finalised a contract to supply liquefied natural gas from its Queensland Curtis LNG project and its Global LNG portfolio to Tokyo Gas. Last year BG and Tokyo Gas signed a heads of agreement for the supply of 1.2 million tonnes of LNG per annum from QCLNG and BG’s global LNG portfolio for 20 years from 2015.

The Japanese utility will also take up a 1.25% stake in the reserves and resources of some of BG subsidiary QGC’s tenements in the Walloons Fairway of the Surat Basin as well as a 2.5% interest in the second train at QCLNG.

BG said the agreement was the first fully termed sales agreement for supply of LNG to Japan source from coal seam gas.

“Tokyo Gas is now an important foundation customer for our ground-breaking Queensland Curtis LNG project,” BG chairman Frank Chapman said.

BG sanctioned the $US15 billion ($A14.8 billion) two-train, 8.5 million tonnes per annum QCLNG project on Curtis Island near Gladstone in October.

First LNG exports from QCLNG are planned to start in 2014. Along with Japan, LNG cargoes are earmarked for China, Chile and Singapore.

Tuesday, 8 March 2011
EnergyNewsPremium.net
http://www.energynewspremium.net/StoryView.asp?StoryID=2382895

Premier Keneally Outlines Strict Coal Seam Gas Guidelines

2011-03-16T15:03:00.002-07:00

New South Wales Premier Kristina Keneally has sided with farmers and environmentalists on the contentious issue of coal seam gas.

Yesterday Keneally announced restrictions on where miners can explore and how the gas can be extracted while speaking in the Hunter Valley.

She announced Labor policy would prohibit exploration near national parks and ban the use of toxic BTEX chemicals in the hydraulic fracturing process, otherwise known as fraccing.

Labor unveiled a ten point coal and coal seam gas plan which said the use of benzene, toluene, ethylbenzene and xylenes would be banned across New South Wales, following in the footsteps of the Queensland government who banned BTEX fraccing late last year.

Coal seam gas in a coal mine was once deemed a significant hazard, but with improving technology allowing it to be retrieved in what the industry says is a safe way, the industry is booming.

Otherwise known as coal seam methane or coal bed methane, it is the natural gas in coal which develops when formed deep underground by heating and compressing plant matter.

Usually the gas is 300-600 metres underground and is extracted through a complicated process where wells are drilled through the coal seams and when the water is pumped out, natural gas is released from the coal.

The benefit of coal seam gas is that it requires little treatment before being used as energy in homes and industry.

But the extraction of the natural gas has faced increasing opposition, with people in areas where coal seam gas is retrieved becoming increasingly concerned for their health and safety.

The concern of residents centres around the fact that almost half the chemicals inserted into the ground to allow the coal seam gas to be extracted can remain in the soil forever, so if the chemicals used are dangerous or toxic they can become part of the groundwater and pose risks to people, animals and property.

“There is no evidence to suggest these chemicals are being used in NSW but everything seems to suggest they are carcinogenic," the Premier said while visiting a vineyard in Millfield.

‘‘They have been banned in other jurisdictions. We think it is appropriate NSW follows suit.’’

She also announced the compensation payed to landowners where wells are installed will be increased under the government’s plan.

"A re-elected Keneally government will mandate minimum payments to landowners to recognise the business consequences of exploration and extraction activities on farming," she said.

There would also be an audit of gas wells and drill sites to examine how operators had compiled their conditions of approval and an industry ombudsman would be appointed to deal with complaints.

But the stricter guidelines have not kept environmental groups happy, and the Nature Conservation Council of NSW said that only some of the issues of coal seam gas have been addressed in the policy changes.

‘‘The proposal to build gas pipelines on travelling stock routes alone could have a significant adverse impact on native wildlife and their habitat,’’ chief executive Pepe Clarke said.

‘‘For too long, the Keneally government has held the community in contempt as it allowed coal and coal seam gas exploration to expand swiftly without strong, effective safeguards for our environment and communities.

’’The government says it will ensure future approvals for gas pipelines will be restricted to public land corridors and stock routes, to avoid agricultural land.

QGC is refusing to comment on the issues outlined in a story aired on the ABC’s Four Corners program last month about some of the issues surrounding coal seam gas in Queensland and have instead released a lengthy statement on their website.

And they are not the only gas company who want to distance themselves from the coal seam gas issues; Australian Mining also contacted MetGasco about the issues surrounding CSG, but they declined to comment, saying coal seam gas was going through a difficult month.

Wednesday 16 March 2011
Australian Mining

Oz natural gas production continues to grow

2011-03-16T15:03:00.001-07:00

AUSTRALIA set a natural gas production record in 2010 while oil production grew more than 16% off the back of the worst annual production level in 40 years in 2009.

Revealed in a report released by energy economics group Energyquest, Australian natural gas production reached a record 1999 petajoules last year, up 5.1% year-on-year due to increasing global demand for liquefied natural gas together with growth in domestic gas-fired power generation.

LNG production rose 6.2% to 19.8 million tonnes per annum due to production from the North West Shelf’s fifth train while the value of LNG exports rose 24% to a record $9.462 billion.

Energyquest chief executive Graeme Bethune said the LNG momentum looked set to continue this year.

“So far this year we have already seen another Gladstone LNG project, GLNG, in central Queensland, reaching sanction and the ConocoPhillips-Origin Energy APLNG, also situated at Gladstone, reaching major milestones,” he said.

“All together there are seven Australasian LNG projects aiming for final investment decisions in 2011, with combined capacity of around 40 million tonnes per annum.”

Domestic gas production increased 2.7% to 1060PJ while coal seam gas production on the east coast reached a record 222PJ.

Gas use for power generation on the east coast continued to grow; however, unlike LNG, there was no line-up of gas-fired electricity generation projects “rushing” towards sanction due to uncertainty over carbon pricing.

“There are many plans and approved sites but not much action partly due to low electricity prices and ongoing heightened uncertainty about carbon pricing,” Bethune said.

The federal government has announced it is pressing ahead with a carbon pricing scheme from 2012, but with many qualifications and not many details.

“The issues here are whether there will be sufficient progress with climate policy this year to provide the certainty investors need to go ahead and, if not, what the consequences might be of continuing stalled development.”

Meanwhile, during 2010, Australian oil production achieved a turnaround after slumping to a 40-year low of 99 million barrels in 2009.

Production grew 16.2% to 116MMbbl in 2010 due to production from the Pyrenees, Van Gogh and Vincent oil fields.

“Reflecting the contribution made by these fields, Apache Energy and Inpex moved up to third and fifth places respectively in the league table of Australian oil producers,” Bethune said.

Tuesday, 8 March 2011
EnergyNewsPremium.net
http://www.energynewspremium.net/StoryView.asp?StoryID=2382893

APLNG gets Qld nod

2010-11-10T21:16:00.001-08:00

THE Origin Energy and ConocoPhillips JV is awaiting federal environmental approval for the two-train Australia Pacific LNG project after receiving Queensland’s environmental go-ahead.

The JV received the approval from the Queensland Coordinator-General, subject to strict conditions, for the development of a gas field over a 30-year period, a 450-kilometre transmission pipeline and an LNG facility on Curtis Island.

APLNG project director Page Maxson said the approval was a significant milestone in realising the potential benefits of the project and ensuring appropriate management of the potential environmental impacts.

“The stringent conditions contained in the Coordinator-General’s report, including detailed ongoing monitoring and reporting requirements, should give the community confidence that the project will meet the high standards required during construction and operation,” he said.

The Queensland Coordinator-General’s report will now be given to the federal government for further consideration and approval.

Late last month, BG Group and Santos received federal environmental approval for their coal seam gas to LNG projects with APLNG hopeful of also gaining approval before making a final investment decision before the end of the year.

Tuesday, 9 November 2010
PetroleumNews.net
http://www.petroleumnews.net/StoryView.asp?StoryID=1542361

Coal seam gas will secure Queensland's future

2010-11-10T21:15:00.003-08:00

Gladstone's Curtis Island will become the site of a liquified natural gas plant. When BG Group set up in Australia three years ago, we had an idea. Now, we have a project.

Over the next four years, BG Group will build the world's first liquefied natural gas plant to use coal seam gas as a feedstock. In doing so, we will create a new industry for Queensland.

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The case against: Reckless rush for new resource
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We will commit US$15 billion to the Queensland Curtis LNG Project development. This is the single biggest investment ever undertaken by BG Group, one of the United Kingdom's largest companies, with operations in 25 countries.

The Curtis LNG Project involves building a plant at Gladstone, a 540km underground pipeline network, and expanding production in the gas fields of the Surat Basin around Chinchilla.

The project will have an operating life of at least 20 years.

We have scheduled first LNG shipments from Gladstone in 2014, with binding commitments with customers in China, Japan, Singapore and Chile. We will also continue to provide gas to markets in eastern Australia.

Over the next four years, the project will create an estimated 5000 construction jobs and, from 2014, nearly 1000 operational jobs. We estimate the project will increase economic activity in Queensland by $32billion over the project's first decade.

We also expect to pay about $1 billion a year in federal taxes and a further $300 million in royalties to the Queensland Government.

Critically, this project – and the new industry it spawns – will provide a sustainable future for many regional Queensland towns and communities which, without this sort of development, may continue to decline.

We expect about half of the project's total capital outlay over the next four years to be spent with Queensland and Australian firms. About 80 per cent of operating expenditure over the next 20 years will be spent locally.

Project benefits will include the availability of treated saline water for local agriculture, towns and industry in the Surat Basin.

The LNG plant will be the most greenhouse gas efficient in Australia and the second-most efficient in the world. LNG from our plant will generate about 35 per cent less greenhouse gas emissions than other fossil fuels.

Federal and state environmental approval for the project has taken into account the many community contributions and challenges detailed in our environmental and social impact assessment.

Our project approvals include about 1500 conditions and the requirement for more than 800 production licences, safety certificates and other environmental permits ranging from pipelines to land access to gas tenements.

Queensland Curtis Liquefied Natural Gas is also one of the first developments in the state to have a full social impact management plan which generates many of the conditions covering community consultation committees and labour.

Together, these mean Queensland Gas Company will minimise, and where possible, avoid social and environmental impacts from the project.

QCLNG is a long-term project that will most likely outlast the working lives of us all and will transcend political cycles.

In this context, we have a special obligation to the communities in which we operate as we bring new jobs, new industry and new infrastructure that otherwise would not occur. With that change, we have a responsibility to maintain – and to improve – the jobs, industry and infrastructure we create because we have become more than just visitors.

We are now neighbours.

We are determined to co-exist with our neighbours – farmers, townspeople, miners, conservationists, traditional custodians, business, and governments.

We have not been deaf or blind to the fears that some hold about our potential impact.

We will bring change – and we will also bring responsibility to the land, the air, the water, and the relationships we have with our neighbours. We see no benefit in working against the best interests of our community and, indeed, it makes no sense to do so.

We are determined to do the right thing.

Our decision to proceed follows nearly three years of rigorous regulatory and public review and discussions with more than 4000 individuals, landholders, indigenous groups, conservationists, industry associations, regional councils and government agencies.

Their contributions have played a key role in shaping our commitments, and government regulations that will serve to ensure this project is good for the environment, good for people, and good for Australia.

Friday 5 November, 2010
Sydney Morning Herald

Australia set to be third biggest gas producer

2010-11-10T21:15:00.001-08:00

Australia is poised to overtake Norway to become the third largest gas producer among OECD nations by 2035, driven mainly by the booming liquefied natural gas sector.

The International Energy Agency's annual world energy outlook report forecasts Australian gas production ranking third among Organisation for Economic Co-operation and Development countries towards the end of the projection period, which is 2035.

By this stage, Australia's gas output will only be surpassed by the US and Canada, according to the report.

Australia's gas output was expected to eclipse Malaysia's by 2020 and Indonesia's by 2025.

The two nations are currently the biggest gas producers in the Asia Pacific region and major LNG exporters.

Graeme Bethune, chief executive of Adelaide-based energy advisory and research company Energy Quest, said Australian gas production was set to more than triple over the projection period, reported AAP.

It would be driven mainly by LNG export projects fed by coalbed methane gas in Queensland, he said.

He said Australian gas production was projected to grow at an average rate of 4.2% per annum until 2035, making it one of the fastest growing sectors in the world.

Wednesday 10 November 2010
Upstream

Qld planning ahead to beat skills gaps

2010-11-10T21:14:00.003-08:00

BG’S announcement last week of a final investment decision for its Curtis Island LNG project has turned the spotlight on skills supply for the booming CSG-LNG industry in Queensland.

Construction of the $US15 billion first phase of the Curtis LNG project begins immediately, with first shipments of LNG scheduled for 2014.

The first phase involves the construction of two trains with a combined capacity of 8.5 million tonnes per annum.

The Queensland government and the major CSG players identified early the potential for a skills shortage to derail the CSG-LNG boom.

This led to the establishment in 2007 of Energy Skills Queensland (ESQ) to lead workforce planning and development for the industry.

Planning is not easy when there is so much uncertainty about the total size of CSG-LNG industry that will emerge over the next six months.

BG is only the first project to reach FID, while the potential for consolidation of some projects introduces another variable into the mix.

Based on a scenario of four LNG trains built across the industry, ESQ forecasts the need for 9200 construction workers over the next few years, with a peak in early 2013. It also estimates a total demand of 3500-4000 operational staff.

Energy Skills Queensland chief executive Glenn Porter said the work done last year by ESQ awakened all stakeholders to the fact that skills for the CSG-LNG projects would not be available at the level required.

“Our Workforce Planning Report in September last year highlighted the need to build a pool of skills over the next two to three years.

“Since then, industry, government and training providers have generally been positive about working together and the need to plan ahead to achieve the right supply of skills.

“In fact, it’s the only instance I can think of where private sector companies in the same industry have collaborated to avoid the skills shortages created by a resource boom.

“These companies usually compete with each other, but they are collaborating with each other, unions and other stakeholders to help the entire industry.

“It’s refreshing to see this sort of approach, rather than the usual solution of poaching workers from other sectors with ever-inflating wages.”

Porter believes the planning and development activity now underway should allow industry to avoid spiralling wage costs and project delays due to skills shortages.

“We are confident that if industry, government and training providers do everything we are recommending they will have enough workers, certainly in the operations phase.

“There could still be some shortages in the construction phase, but nothing like those seen in other resource booms in Queensland or Western Australia.”

However, the supply of skills could still be tight if another boom in the Queensland coal industry coincided with the peak of construction activity on the CSG-LNG projects in early 2013.

“The skills needed by the coal mining industry are similar to those needed in these CSG-LNG projects. A coal industry boom in about two years time could certainly create pressure, but that’s not something we can plan for at the moment.

“Based on what we can foresee at the moment, and if industry, government and training providers continue their positive approach, I think we will have enough skills.”

Porter said the CSG-LNG projects were already drawing hundreds of new workers to Queensland.

“I meet people every day who have moved to Queensland because of these projects. I meet engineers who have moved from overseas and tradespeople from interstate and from offshore as well. These projects are creating a lot of opportunities.”

One of the major challenges for Queensland in avoiding a shortage of professional skills is the fact that LNG is a new industry for the state, and the coal seam gas industry did not even exist less than a decade ago.

The degree courses offered by the state’s tertiary institutions reflect Queensland’s historic strengths in mining and coal.

For example, the University of Queensland does not offer a petroleum engineering course, although moves are underway to add relevant degree courses at more than one of the state’s universities.

Earlier this year, the Queensland government and the key CSG players announced $10 million in funding in a joint program managed by ESQ to train workers for the boom.

Most of the funding will be directed at upskilling mining industry workers and equipping new workers with the skills in drilling, production, maintenance, electrical, instrumentation and logistics.

Southern Queensland Institute of TAFE is one of the leading training providers in trades and technical skills.

Director of client relations Janelle Choyce said the TAFE had been planning for the boom for a number of years and had worked closely with the leading CSG players.

“We have had our own staff placed inside those companies to find out exactly what their needs will be.

“As a result, we have developed programs that will match the full range of their skill needs, from process manufacturing, electrical and civil works. We also have a big emphasis on providing training to meet the require safety certificates.”

Southwest Queensland TAFE has nine campuses across southwest Queensland and a main campus at Toowoomba, placing it near the geographic heart of the Surat Basin and ready to deliver skills where they will be most needed over the next few years.

Thursday 11 Nov, 2010
PetroleumNews.net
http://www.petroleumnews.net/StoryView.asp?StoryID=1542438

CSG-LNG industry takes a big leap

2010-11-10T21:14:00.001-08:00

AFTER three years, BG Group’s Queensland Curtis liquefied natural gas project has moved a step closer to reality with the company taking the lead in the race to establish the world’s first coal seam gas to LNG project.

Yesterday, the British giant made a $US15 billion ($A15.2 million) final investment decision on the two-train, 8.5 million tonne per annum project on Curtis Island near Gladstone.

Over the next four years, QGC, BG’s Australian subsidiary, will construct the liquefaction plant, field facilities and a 540-kilometre underground pipeline network linking its CSG fields in the Surat Basin to the LNG plant on Curtis Island.

“This is the single-biggest investment ever undertaken by BG Group,” QGC managing director Catherine Tanna said.

“Three years ago when BG Group set up in Australia we had an idea. Today, we have a project.”

Federal Resources Minister Martin Ferguson, who was in Brisbane along with Treasurer Wayne Swan for the announcement, said the decision was an important and exciting leap ahead in the development of Australia’s vast CSG reserves.

“It is a new history for Australia in terms of export opportunities,” he said. “It is a first.

“Only now we’re going to see a flurry of activity following the leadership of BG from other competitors in terms of actually delivering similar projects.”

BG has been regarded as the leader of the pack in the Queensland CSG-LNG industry and was tipped to be the first to cross the line.

Santos, which is planning to develop the Gladstone LNG project, and Origin Energy and ConocoPhillips, which are working on the APLNG project, expect to announce FID before the end of the year.

Treasurer Wayne Swan said the project would not only deliver a huge boost to the Queensland economy but also to the Australian economy.

“It will provide vital support to jobs, to small business, to future investment and, if we do that within a framework of environmental protection and the protection of agricultural production, it will also bring a very substantial boost to Australian exports.

“The plant will be half the size of the whole North West Shelf project and that will go in place in four years,” he said.

“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.”

QCLNG is estimated to create 5000 construction jobs over the next four years and from 2014, 1000 jobs in operations.

“We estimate that the project will increase economic activity in Queensland by $31 billion over the project’s first decade, or $2.6 billion a year,” Tanna said.

“We also expect to pay about $1 billion a year in federal taxes and a further $300 million or so each year in royalties to the Queensland government.”

The Australian Petroleum Production and Exploration Association said the $US15 billion commitment was a watershed moment for Australia’s oil and gas industry.

“Today’s announcement makes Australia’s east coast LNG province a reality and places Australia as the world leader in the coal seam gas-based LNG industry,” APPEA chief executive Belinda Robinson said.

“Queensland is now home to the world’s first LNG industry to use coal seam gas and the economic and employment benefits to Queensland and Australia of this new industry will be profound.”

Robinson added that the environmental gains would be just as significant.

“When Australian LNG is used in place of coal to generate electricity in customer countries, up to nine tonnes of greenhouse gas emissions are avoided for every tonne produced in the production, liquefaction and export process,” she said.

“This is because gas-fired power stations emit up to 70 per cent less greenhouse gas emissions than coal-burning plants.

“The further development of Australia’s gas export industry represents Australia’s best opportunity to assist the largest and fastest-growing economies of Asia to move to a less carbon intensive energy future by substituting some of their coal-fired power generation with Australian natural gas.”

Queensland Resources Council chief executive Michael Roche welcomed the decision and said the rise of Queensland’s CSG industry over the past 15 years was a “phenomenal achievement”.

“Queensland has never seen a financial investment and technology uptake of the magnitude surrounding the birth of this new export pillar for Australia's future,” he said.

“A coal seam gas-based export industry has moved literally from pipedream to economic reality in less than a decade, but with all the built-in safeguards that the community expects from a 21st century industry.”

First LNG exports from QCLNG are planned to start in 2014, underpinned by agreements in Chile, China, Japan and Singapore for the purchase of up to 9.5MMtpa of LNG.

In March, the company signed an agreement with China National Offshore Oil Corporation for the supply of 3.6MMtpa of LNG for 20 years.

This was followed by a 1.2MMtpa agreement with Tokyo Gas and, just on Friday, the company reached an agreement for the supply of 120 cargoes with Chubu Electric Power over a 20-year term, starting in 2014.

A fully termed LNG sale and purchase agreement is expected to be signed in the first half of 2011.

Monday, 1 November 2010
PetroleumNews.net
http://www.petroleumnews.net/StoryView.asp?StoryID=1542016

BG signs off on Curtis LNG

2010-11-10T21:13:00.000-08:00

UK player BG Group has given final approval for the world's first coalbed methane (CBM) to liquefied natural gas development, the A$15 billion (US$14.8 billion) Curtis LNG project in Queensland

Chief executive Frank Chapman said the Curtis LNG project would include the world's first LNG plant to be supplied by CBM and was "the foundation project at the centre of a major new Australian export industry".

The first phase of the development will see a two-train liquefaction plant with a combined capacity of 8.5 million tonnes per annum built at Curtis Island near Gladstone.

A 540 kilometre pipeline to carry gas from the Surat basin in southern Queensland will also be built.

First LNG exports are scheduled to start in 2014, underpinned by agreements in Chile, China, Japan and Singapore for the purchase of up to 9.5 million tpa of LNG.

BG Group Chief Executive Frank Chapman said: "In early 2008, we announced our first investment in Australia. Today, less than three years later, we are announcing our decision to develop the world's first LNG plant to be supplied by (CBM).

"Today's decision represents the realisation of a pivotal strategic objective for BG Group - to further the globalisation of our LNG business by establishing a new and material source of equity LNG in the Asia-Pacific arena."

Today's announcement also completes the final condition required for implementation of BG's agreements with the China National Offshore Oil Corporation (CNOOC), sealed in March this year.

Under the deal, CNOOC will buy 3.6 million tpa of LNG for a period of 20 years from the Curtis and take a 5% stake in a number of BG tenements in the Walloon coal measures in the Surat basin.

CNOOC will also join BG in a consortium to build two LNG carriers in China and become a 10% equity investor in the first LNG train in the initial phase of the liquefaction plant.

BG has already lined up a number of contractors to carry out work on the first phase, including Bechtel and WorleyParsons.

The Australian federal government welcomed the decision, saying it would create 5000 jobs during construction and 1000 permanent positions, boost Australia's foreign direct investment by 11% and exports by around A$4 billion annually.

"It marks an important and exciting leap ahead in the development of Australia's vast (CBM) reserves - reserves that in Queensland alone are estimated to be enough to power the whole state for more than 500 years," Australian Treasurer Wayne Swan said in a joint statement with Resources & Energy Minister Martin Ferguson.

BG Group said the decision to proceed with the project followed environmental approvals from the Australian government and Queensland state government.

Mon 1 Nov 2010
Upstream

Removing the CSG water headache

2010-11-10T21:12:00.000-08:00

A SOLUTION for cost-effective removal of salts from coal seam gas water is on its way with Penrice Soda Holdings expected to announce a deal with a CSG producer to construct a pilot plant in Queensland by Christmas.

Penrice Soda, Australia’s only soda ash producer, has developed technology to remove salts from the CSG water stream.

Managing director Guy Roberts told PNN the company had always been aware of carbonate salts residing in underground aquifers in Queensland, but it wasn’t until the CSG industry kicked off that it became economic to remove the salts from the water and process it into a saleable form.

“We knew that carbonate salts were in the water and about two or three years ago, we become involved in discussions with one of the coal seam gas producers who approached us, and that was the catalyst for this new round of studies and for our involvement in the industry,” he said.

“The technology that we’ve developed really derives from the technology that we employ in our own manufacturing business. We’ve taken this technology and we’ve applied it to the unique water that sits up there in Queensland and we’ve worked out a method to extract the sodium salts out of it.”

The technology could solve a major environmental concern for CSG producers. In recent months, concerns have been rife about the effects of CSG drilling on groundwater supplies in Queensland.

Last month, the concerns were further fuelled by the recent discovery of traces of BTEX (benzene, toluene, ethylbenzene and xylenes) in exploration wells fracced by the Australia Pacific liquefied natural gas joint venture.

Subsequent chemical analysis of the samples confirmed the fracture stimulation operations have not affected landholder water bores and none of the samples showed unsafe levels of the chemicals.

“Our advantage for the coal seam gas producers is that we take the problem away so they don’t have to worry about it,” Roberts said.

“We turn their waste headache into something saleable and sell it.”

Roberts said the technology works by the produced CSG waste water running through a reverse osmosis (RO) plant to create a pure water stream and a reject water stream.

The pure water stream would be applied to the environment or for human consumption as required, while the reject stream would be processed through a chemical plant to create saleable salts, including salt, soda ash and sodium bicarbonate.

“The water that comes through the RO plant will be drinking water standard and will be put back into the environment or community, depending on what approvals the producer has obtained,” Roberts said.

“The water that we take from the reject stream out of the RO plant gets crystallised in small drying ponds and then goes through a 12-stage chemical process where we’ll make probably a combination of three products.

“There’s no waste stream out of this Penrice process. Everything gets consumed to make saleable products.”

Penrice is in discussions with a CSG producer to construct a pilot plant, the first step in commercialising the technology.

The pilot plant will allow the company to show that it can make saleable products before it designs a commercial-scale plant.

“At the moment we have this unique technology which we have been developing ... it is yet to be scaled up into a commercial-scale operation and so we’ve really got to demonstrate the technology first,” Roberts said.

“We expect to be announcing construction of the first pilot plant by Christmas.

“The plant might be the size of a small house sitting in the middle of the field which we’ll run for about six months to demonstrate that we can make the product that we think we can, and that will give us a lot of confidence to move forward.

“Ultimately, whether we have one large plant or several smaller ones is yet to be determined ... but we’re not talking about a landscape littered with these things at all.”

Wednesday, 3 November 2010
PetroleumNews.net
http://www.petroleumnews.net/StoryView.asp?StoryID=1542117

BG still tipped to be first across the line

2010-10-28T16:28:00.003-07:00

WITH the initial elation over environmental approval for their respective projects over, BG Group and Santos are now considering the conditions set by federal Environment Minister Tony Burke, though BG could still approve its project this week.

The 300-plus conditions include detailed planning and monitoring to protect groundwater resources; management plans for aquifers, groundwater and surface water; ensuring reinjected water is of suitable quality; rehabilitating large areas of land; and cooperating with other coal seam gas players and the Queensland Water Commission to develop a regional model for the ongoing assessment of the impacts on ground-water activity.

Additionally, BG will be limited to 6000 wells for its 8.3 million tonne per annum Queensland Curtis Liquefied Natural Gas project and Santos limited to 2650 wells for its initial 3.6MMtpa Gladstone LNG project.

While accounting for these conditions could take some time, BG has been ready to give approval for QCLNG since the first half of this year and is expected to be the first to make a final investment decision, which could come early this week, while Santos still needs to finalise its funding arrangements, The Australian reported.

The green light from Burke is also heartening for Origin Energy’s Australia Pacific LNG joint venture with ConocoPhillips, which is now expecting the Queensland state government to approve its project and could secure federal government approval faster as well.

APLNG general manager Paul Zealand told The Australian the project remained on track to have all relevant information to the Origin and Conoco boards in time for them to make a decision by the end of the year.

He added the recent discovery of small traces of benzene, toluene, ethylbenzene and xylene was not affecting the timetable, calling it “an isolated incident we don’t yet understand”.

Zealand said fears BTEX would be released into the head of the Murray-Darling River system were not justified, as water released from CSG wells would go through strict tests in order to pick up the compound before being discharged.

“It is drinking-water standard being discharged from the osmosis plant into the river,” he added.

Meanwhile, reactions to the environmental approval were clearly in-line with the split between project proponents and environmentalists.

The Queensland Resource Council was noticeably upbeat, saying that Queensland could look forward to the creation of about 10,000 construction phase jobs and almost 2000 operational jobs.

“Together, these projects will announce Queensland as a serious player in the global gas market, with the Asia-Pacific region forecast to dominate energy demand growth for decades to come,” QRC chief executive Michael Roche said.

He added the exhaustive government approval conditions combined with a host of new environmental and water management laws and rules would make Queensland’s CSG-LNG export operations the most highly regulated resource projects in the state’s history.

“The regulatory protections for the environment and for host communities are comprehensive and appropriate but it’s likely they will never satisfy trenchant resource sector opponents,” Roche said.

“However, the Queensland community can be assured that these projects are set to deliver substantial benefits in new investment, jobs, export income and a new stream of royalty revenue for taxpayers, while operating under strict government regulation and supervision.”

This mirrored APPEA’s earlier statement welcoming the approval and saying it presented unparalleled economic and environmental opportunity.

On the other side of the fence, Friends of the Earth spokesman Drew Hutton told the AAP the conditions failed to offer real protection for the Great Artesian Basin and the Condamine alluvium.

“The government should have instead put off limits any areas of the basin where drilling could result in massive draw downs in the water table,” Hutton said.

Meanwhile, Capricorn Conservation Council spokesman Ian Herbert said no amount of conditions could stop the project having a major and irreversible effect on the environment.

He said the projects would deplete the amount of groundwater available to farmers in the Western Darling Downs region, while dredging of Gladstone Harbour would threaten the habitat of turtles, dolphins and other marine life.

Herbert also criticised the job creation benefits claimed by project proponents, saying it was a temporary measure.

“In 20 to 30 years time we're going to be left with these plants and at some stage in the future it will all be no longer required once the gas has been pumped out.”

Both QCLNG and GLNG, located at Gladstone, are scheduled to start production in 2014.

Monday, 25 October 2010
PetroleumNews.net
http://www.petroleumnews.net/StoryView.asp?StoryID=1541704

APLNG to secure buyers, make FID by year-end

2010-10-28T16:28:00.001-07:00

CONOCOPHILLIPS hopes to secure offtake agreements and make a final investment decision on the Australia Pacific LNG joint venture’s two-train, 14-15 million tonne per annum project before year-end.

During a third-quarter earnings conference call, chief executive officer Jim Mulva said the groundwater contamination scare at APLNG’s operations in the Surat Basin was not affecting discussions with potential LNG buyers.

Last week, the JV found traces of banned carcinogenic BTEX (benzene, toluene, ethylbenzene and xylenes) chemicals in fluid samples taken from eight coal seam gas exploration wells in the Surat Basin.

“With respect to the information on some of the wells, it’s really not having an impact with respect to discussions with potential buyers of LNG from this project,” he said.

“Certainly, most concerned to ourselves, we address this. We think we’re going to be able to handle this, but it’s not having an adverse impact with respect to potential buyers.”

Conoco vice-president for investor relations Clayton Reasor said during the conference call the JV was engaged with several potential LNG buyers as it moves to make a final investment decision before the end of the year.

“In Australia, APLNG is engaged with several potential LNG buyers in support of moving to FID, but we’re not in a position to discuss information regarding specific market discussion at this time,” he said.

“However, we plan to have an announcement regarding the sale of two trains of LNG before year end.”

Earlier this month, an analyst report from Citigroup claimed the JV was considering a single LNG train rather than two trains for the initial stage of the $35 billion project.

The report said that regional oversupply of LNG could force APLNG to halve the size of its initial stage, adding it was unsure if Tokyo Gas, believed to be one of the buyers, was interested in taking LNG derived from coal seam gas into its portfolio.

The most likely target customers for APLNG were in China and India.

Meanwhile the company reported its third-quarter earnings more than doubled from the same period last year due to higher oil and gas prices and better margins for refined products.

Profit for the period was $US3.06 billion, up from the $1.47 billion a year earlier.

The company’s exploration and production business reported a 60% profit jump to $1.5 billion while production of 1.72 million barrels of oil equivalent per day was 4% lower than the previous corresponding period due to field declines in North America and Europe, as well as asset sales.

Thursday, 28 October 2010
PetroleumNews.net
http://www.petroleumnews.net/StoryView.asp?StoryID=1541890

Consolidation imminent for Curtis Island LNG

2010-10-28T16:27:00.005-07:00

SPECULATION is growing as to which liquefied natural gas (LNG) proponents will be swallowed up or assimilated from four LNG plants on Curtis Island to two.

Since Friday’s announcement of federal government approval of Queensland Curtis LNG and Santos GLNG plants, pipeline and shipping, analysts are predicting one of the proponents will soon make their move to consolidate.

In the liquefied natural gas (LNG) stakes, BG, owner of QGC (Queensland Curtis LNG) is in a more secure position among Curtis Island’s LNG stakeholders.

QGC has gas and a plan far enough advanced to not need to talk to competitors Shell, Santos and Origin about consolidation.

And Santos has caught up with QCLNG with their final investment decision to be made around the same time as QGC in December.

Other LNG Curtis Island proponent Australian Pacific LNG (APLNG) is expected to obtain environmental approval before QGC and Santos as the Government now has an LNG blue print due to the work already done.

It’s been reported the Queensland Coordinator-General had been waiting on the ruling last Friday from Federal Environment Minister Tony Burke on the BG and Santos projects before issuing a decision on APLNG, in case it brought up more issues.

In a statement, APLNG said the recent discovery of small traces of benzene, toluene, ethylbenzene and xylene, a poisonous compound known as BTEX, in eight exploration wells near Miles on the western Darling Downs was not affecting the timetable.

In May, The Observer reported the head of Shell Australia, Ann Pickard, believed consolidation made sense, with Royal Dutch/Shell bidding unsuccessfully for a strategic stake in the Santos-led Gladstone Liquefied Natural Gas project.

LNG proponent Arrow Energy was successfully assimilated by Shell and PetroChina, with the LNG project now called Arrow Energy LNG.

Analysts are predicting one of the proponents will soon make their move to consolidate.

Thursday 28 October 2010
Gladstone Observer

Green light for new coal seam gas projects

2010-10-28T16:27:00.003-07:00

Tony Burke has imposed 300 conditions on each of the two projects. BG Group and a Santos, Petronas and Total consortium want to build coal seam gas projects in the Bowen and Surat basins.

The gas would be piped to Gladstone in central Queensland, converted to liquified natural gas and shipped overseas.

The projects received state approval earlier this year, and after months of delay the Federal Government has given the go-ahead this afternoon.

But Federal Environment Minister Tony Burke says he has imposed 300 conditions on each of the two projects which are aimed at protecting the areas affected.

"While there are significant economic benefits which must be a consideration in my decision, my focus has been on protecting environmental matters," he said.

"I've also considered potential impacts on agricultural land.

"Among other economic and social matters, we must protect the Great Artesian Basin, our threatened species, our waterways and the Great Barrier Reef."

The companies will now decide whether the projects are still viable with the attached conditions.

Santos says it expects to make a final investment decision by the end of the year.

'Turning point'

Queensland Premier Anna Bligh says the approval marks a turning point for the Queensland economy.

"The significance of this is a whole new industry," she said.

"It is as big and important for Queensland as the opening up of the Bowen basin was decades ago."

Ms Bligh says it will be five years before royalties from the gas projects start flowing to the State budget.

She says they are expected to start production in four to five years.

"In 2015 we would expect to see royalties coming in to the Queensland budget and it will depend on how much is exported at that time," she said.

"But there will be a 10 per cent royalty.

"It will come into the State budget and the people of Queensland right across the state, including these communities will directly get the benefit."

The Queensland Opposition says it also supports the two LNG projects.

Opposition spokesman Tim Nicholls says the multi-billion dollar projects would be a boost for the state.

"We support the development of the LNG industry, with all the appropriate safeguards and conditions," he said.

"We see it - in terms of investment and what will happen for Queensland - this is almost equivalent to the Snowy Mountain scheme - thousands of jobs.

"This is a momentous event for Queensland."

Friends of the Earth spokesman Drew Hutton says he is disappointed the projects have been given the green light.

"There are people out on the Darling Downs and elsewhere in Queensland who are going to be very massively impacted by this development," he said.

"Farmers ... are going to lose their water, farmers who are going to have their land impacted upon, residents who are going to have their lifestyle affected.

"There are towns who are going to find themselves without water."

'18,000 jobs'

Industry groups say the coal seam gas resources in Queensland and New South Wales could power a city of 1 million people for 5,000 years.

Australian Petroleum Production and Exploration Association (APPEA) spokeswoman Belinda Robinson says the plants proposed by Santos and the BG Group have the capacity to transform the gas into a huge cash injection for Queensland.

"It would generate about 18,000 jobs, certainly many billions of dollars in export revenue and would increase the Queensland gross state product by 1 per cent," she said.

The coal seam gas would be piped from the fertile Surat Basin in southern Queensland to Gladstone, where it would be liquefied and shipped overseas.

Gladstone's acting mayor Gail Sellers says the plants are welcome if they generate jobs.

"Part of what will be involved in this will be training," Ms Sellers said.

"We're looking at the future for our children and apprenticeships will be more forthcoming."

Gladstone's Member for Flynn, Ken O'Dowd, says the region will be able to handle an influx of workers.

"BG Gas alone will need about 5,000 people in the construction phase and Santos are pretty keen to get going as soon as possible too - they'll have another 6,000 too," he said.

"They've done it before and I think we can do it again."

Contamination concerns

The industry has been plagued with issues this week in Queensland, with toxic chemicals known as BTEX found in eight coal seam gas wells.

There have been protests in New South Wales about the impact of coal seam gas extraction on the wine and tourism industries.

Southern Queensland cotton and grain farmer Ian Hayllor says the Federal Government is taking a serious environmental risk by approving the plants.

"Our biggest concern is the lack of understanding of the impacts on the ground water system especially the Great Artesian Basin and the associated aquifers," he said.

"Massive amounts of water are going to be extracted from these aquifers and we don't believe the science is there yet to understand the full implications of that process."

Friday 22 October, 2010
ABC News

Cooper gas slated for GLNG

2010-10-28T16:27:00.001-07:00

BEACH Energy is poised to capitalise on its Cooper Basin assets with the South Australian Cooper Basin joint venture signing a deal to supply 750 petajoules of gas to Santos’s Gladstone liquefied natural gas project.

Under the agreement, the SACB JV in which Beach, Origin and Santos are participants, could supply 750PJ of uncontracted gas under an oil-linked pricing structure from the Cooper to the Wallumbilla gas hub in Queensland, starting in 2014.

Beach’s 20.21% share of this gas supply volume would be about 152PJ.

The gas will be supplied over a 15-year period and is conditional on a final investment decision on GLNG train 2.

Beach managing director Reg Nelson said the significant additional demand for gas heralded a new era for the Cooper Basin.

“This proposal brings a new large scale consumer with export market opportunities,” he said.

“If consummated, the deal will set the foundation for ongoing growth and optimisation of the Cooper Basin for the next 20 years and beyond.”

Santos chief executive officer David Knox said the agreement opened an export channel for Cooper Gas and gave the GLNG project a significant strategic advantage in being able to execute the most capital efficient ramp-up of gas supply for trains one and two.

“In combination with Roma underground gas storage, supply of unconventional Santos portfolio gas will enable GLNG to optimise both CSG field development and LNG ramp-up,” he said.

“These levers provide GLNG with a significant strategic advantage.”

The deal could also help Santos secure buyers for GLNG, making an LNG supply deal more appealing because of the potentially higher calorific content compared with LNG sourced from coal seam gas.

Santos vice-president Eastern Australia James Baulderstone said the GLNG supply deal, along with Cooper domestic gas contracts valued at more than $400 million gross already agreed or pending this year, highlighted the long-term importance of the existing Moomba facilities in eastern Australia’s gas infrastructure.

No material capital expenditure will be required before 2014 to deliver the gas, with firm pipeline capacity to transport the gas from the Moomba to the Wallumbilla gas hub in Queensland available to Santos via Epic Energy.

Santos has a 66.6% interest in the SACB JV with Beach holding 20.21% and Origin Energy 13.19%

Cooper Basin landscape
PetroleumNews.net
http://www.petroleumnews.net/StoryView.asp?StoryID=1541705

Unconventional Gas Week launches in Brisbane

2010-03-25T19:58:00.000-07:00

Next Week's Unconventional Gas Week hits Brisbane at an exciting time for the industry on the cusp of a new gas boom for Australia!

This unique event features two high level events, CSG 2010 - The largest event dedicated to the Coal Seam Gas industry in Australia - and The Shale Gas Briefing – the first event to solely focus on the next lucrative fuel source.

Details for the events as below:

CSG 2010
29 – 31 March 2010
Dedicated to growth and innovation in Australia’s Coal Seam Gas market www.csgsummit.com.au

Shale Gas Briefing
30 – 31 March 2010
The next step in unconventional gas development
www.iir.com.au/shale

Head to Brisbane next week to meet with senior decision makers from all areas of the gas sector in one place and do business with the people who will expand your company.

Benefit from the best case studies, keynote presentations, panel sessions and interactive workshop modules led by the most highly respected speakers, that encompasses all areas of the unconventional gas arena.

If you'd like to know more about the events, head to www.unconventionalgas.com.au for more information or alternatively, click here to send an email to James Stackhouse (marketing manager) for both events.

We hope to see you there!

Surat Basin gets funding to handle CSG boom

2010-03-21T14:54:00.005-07:00

QUEENSLAND has set aside $23.65 million for infrastructure and services projects for the Surat Basin region as part of its $100 million Sustainable Resource Communities policy to manage growth in boom areas.

“The emergence of the $40 billion LNG industry will bring wealth for Queensland and we want to ensure that the local communities in the region benefit from this growth,” Premier Anna Bligh said.

“An important part of our growth management strategy is to create opportunity in the regions to move more of our population growth outside of the SEQ (southeast Queensland) corner.

“The only way that will work is if we manage growth well in these regions to make sure we retain and improve levels of liveability. Our boom areas need to be places where people want to live and raise a family.”

Included in the funding package is $4.7 million for an upgrade of Roma Airport’s runway, terminal, car park, security fencing and access roads to enable access by larger aircraft, as well as $4.5 million to establish a trade training hub with the construction of a training centre at Miles State High School and refurbishment of existing school-based industrial workshops at Wandoan and Taroom schools.

The airport upgrade is expected to attract further contributions from industry, while the participating schools in the hub will work closely with the coal seam gas industry to ensure students are equipped with training in CSG production skills.

“The LNG industry is fantastic news in terms of jobs, economic growth and prosperity but local communities are concerned about the pressure this rapid growth may cause,” Bligh added.

“We are listening to community concerns from Toowoomba throughout the Western Downs and Maranoa, and from Banana to Gladstone about the need for increased transport options, better infrastructure and affordable housing.

“The Surat Basin Future Directions Statement is a major long-term commitment to the region to help prepare and plan for opportunities and to overcome the challenges associated with its growth.”

Friday, 19 March 2010
PNN=

Problems on horizon for LNG plan

2010-03-21T14:54:00.003-07:00

Kimberley Lowe sings the national anthem before an audience at the Gladstone Region of Choice summit.

Chrissy HarrisThe Australia Pacific LNG announced yesterday at the Region of Choice summit that 5000 jobs will be created with another 10,000 indirect jobs generated from the Curtis Island LNG project, but warned of looming problems.

Deputy project manager for Australia Pacific LNG project Richard A. D’Ardenne said the first shipment of LNG was scheduled for late 2014.

“Maybe not all the capacity that is possible for LNG plants will go forward, but there is still a significant amount of work in the area,” he said.

“We will have problems with the labour force, especially the provision of skilled labour. We can’t wait for final investment decisions with these projects in order to mitigate some of those concerns.”

"To get skilled craftsman and instrument electrical workers takes time. There is going to have to be commitments to move forward with some of those programs early. There are significant issues and significant problems are looming for this industry,” he said.

The Australia Pacific Project manager said LNG developments will put pressure on Gladstone’s infrastructure.

“We will have problems with transport and road infrastructure. We think we are okay with school infrastructure but then you start talking about bringing skilled teachers into the area,” he said.

“However, when the housing prices start going up how are you going to attract people to teach here when they can’t afford to live here?

“We are planning, however, to have up to 80 per cent of our workforce fly in and out because we think we will only be able to attract 20 per cent of a local workforce,” Mr D’Ardenne said.

Friday 19 March, 2010
The Observer

Arrow deal sooner rather than later

2010-03-21T14:54:00.001-07:00

Arrow Energy is expected to inform the market later today of a sweetened offer from Royal Dutch Shell and PetroChina which is largely targeted at securing its coal seam gas reserves.

After spending the last two weeks in "active discussions" with Shell and PetroChina, BusinessDay believes Arrow has successfully put its case that the $3.3 billion, $4.45 a share offer, excluding its international operations, undervalues the company.

The market had been betting on an improved offer from the pair pushing Arrow shares up to $5.29 before the company went into a trading halt earlier this morning.

In the statement, Arrow requested the trading halt until Tuesday but sources say an announcement could be released late this afternoon.

The coal seam gas tie-up would continue consolidation in the overcrowded Queensland space, which currently has at least four proposed projects but which can only accommodate one or two.

The takeover will need the approval of the Foreign Investment Review Board. Analysts believe BG's takeover of Queensland Gas Company helps pave the way for FIRB to give the takeover the green light. However the involvement of PetroChina means the board will take a close look at the deal. FIRB has publicly stated its preference for state-owned companies to keep their stakes in Australia's peak resources assets to no more than 15 per cent, ensuring they stayed mostly in private hands.

With Arrow's partner in the Fisherman's Landing coal seam gas to liquefied natural gas project, LNG Ltd, earlier this week getting approval to seek other sources of gas it appears that Shell and PetroChina may have hit their target.

Friday 19 March, 2010
The Age

AGL next on gas radar for Shell and PetroChina

2010-03-13T17:01:00.001-08:00

From: The Australian

March 10, 2010 12:00AM

ROYAL Dutch Shell and PetroChina's joint tilt for Arrow Energy could be followed up by a $1.3 billion bid for AGL Energy's Queensland coal seam gas assets as the majors extend their grab for reserves.

Shell and PetroChina want to gain a hold over enough reserves to underpin two liquefied natural gas trains at Gladstone.

It is understood that if successful with the Arrow takeover, Shell and PetroChina have agreed to jointly pursue a two-train project at Curtis Island to produce 7.4 million tonnes of LNG exports a year, supplied at least in part by Arrow's CSG acreage.

Arrow, which was forced to cancel a London and New York roadshow this week because of the $3.3bn joint bid lobbed late last Friday, was last night still weighing up the cash offer against its plans to buy LNG Ltd's Fisherman's Landing LNG project.

Credit Suisse analyst Sandra McCullagh said if the deal went ahead, AGL might consider selling reserves at its 50 per cent-owned Moranbah CSG project in Queensland's Bowen Basin.

Arrow is the operator of Moranbah, with 35 per cent. Shell owns the remaining 15 per cent.

Ms McCullagh said that under Shell, which would become the operator, the Moranbah reserves would probably be directed to LNG, a business AGL had previously said it was not keen to be in. "This would likely see the assets become non-core to AGL, which could be the catalyst for AGL to sell out of the project," she said.

Based on metrics from the Arrow proposal, a sale of the acreage, which has about 2000 petajoules of 3P -- or proven, probable and possible -- reserves, could fetch $1.3bn, Credit Suisse said.

An AGL spokesman said no offer had been received.

While Credit Suisse said Shell and PetroChina might be able to achieve a discount for AGL's Moranbah stake because of a lack of other bidders, the big part Moranbah plays in AGL's plans to shore up 2000PJ of proven and probable, or 2P, reserves (it currently makes up 500PJ) might not make it an eager seller.

Shell and PetroChina want to take Arrow over through a scheme of arrangement, which would require an Arrow shareholder meeting to approve it if the target's board agrees.

Shell, which is seeking government approval to eventually build four LNG trains at Gladstone, previously said it wanted first LNG from Curtis Island in 2015.

To underpin the two trains, Shell and PetroChina would need about 10,000PJ of 2P gas reserves.

If the pair acquire Arrow, they will have 5271PJ of 2P reserves (including the 30 per cent of Arrow's acreage Shell acquired last year), meaning they will need to explore further or acquire new ground.

It is understood talks to finalise the Fisherman's Landing deal, for which a heads of agreement was signed in January, have been stalled by Arrow until it decides whether to accept the takeover.

Arrow stock eased yesterday, slipping 9c to $5.02. This is 57c higher than Shell's $4.45-a-share cash bid, which does not include Arrow's international assets.

Analysts have valued the international assets at 55-75c a share.

Most analysts say there is little chance of another bidder emerging but they are mixed on whether Arrow will be able to extract more out of Shell and PetroChina.

Central locks in rig for Pedirka CSG campaign

2009-11-08T21:05:00.000-08:00

CENTRAL Petroleum is gearing up for a five-well coal seam gas drilling campaign that is targeting up to 70 trillion cubic feet of prospective resources in the Pedirka Basin, central Australia.

The company has signed a contract with Wallis Drilling to drill five CSG wells over the next five months in EP 107 and 93, as part of its $32 million phase one 2009 exploration program.

The first well is due to spudded in EP 93 in the first week of December.

The drilling contract follows the signing of a contract with Terrex Seismic for a 1350-kilometre 2D seismic survey over the Pedirka and neighbouring Amadeus Basin.

According to Central, the seismic survey will be the largest single survey to be carried out in the relatively underexplored basins.

“These two contracts represent another milestone for our exploration in central Australia, paving the way for the next phase of an extensive drilling and seismic exploration program to prove up the tremendous potential for hydrocarbons that all our previous surveys have been pointing to,” managing director John Heugh said.

“If the results from these first five CSG wells are successful, subject to joint venture approval, they could be followed up quickly with further fully cored and/or production test CSG wells in the Pedirka Basin.”

Heugh added that the seismic acquisition, which will run over into next year, would not only provide more detail and a possible expansion in size of up to five existing oil, gas and helium prospects planned for exploration in 2010, but also open up a number of other new leads for follow-up work.

“Although the company aims to potentially develop large-scale GTL [gas to liquids] and helium extraction industries in the longer term based on gas of various compositions inclusive of CSG, it has also recently committed to a scoping study of various plant designs and sizes for relatively low-volume helium extraction and monetisation, subject to discovery, which, along with the potential of significant oil discovery may hold promise for much earlier cash flow.”

Central’s phase one program will include a comprehensive geochemical survey over the Johnstone, Surprise and Stuart oil prospects in the Amadeus Basin, and the drilling of the Ooraminna-2 conventional well early next year.

Monday, 9 November 2009
PNN

Origin ramping up CSG production

2009-10-28T21:09:00.001-07:00

ORIGIN Energy has posted a 1% quarterly increase in production to 25.4 petajoules equivalent for the September quarter as coal seam gas development continues to pick up pace.

While the company reported a 25% drop in production year-on-year, this is due to the 50% dilution of its interest in almost all of its CSG permits under the Australia Pacific LNG deal with ConocoPhillips.

Revenues for the September quarter were up 8% over the previous quarter to $146.2 million but down 26% year-on-year due to the APLNG transaction and lower international prices for oil, condensate and LPG.

Over the quarter, Origin completed drilling of all wells in Phase 5 of its Spring Gully gas development. Seven wells were brought online while the remaining 13 wells will be brought online soon to complete this phase of the project.

The company said that well productivity had exceeded expectations and it expects total project production capacity to exceed the Phase 5 target of 150 terajoules per day once the additional wells are online.

It added that civil works at the Taloona gas plant as part of the Phase 6 development were in progress. This phase includes the drilling of a further 31 wells and the construction of additional capacity at Talloona to increase overall Spring Gully capacity to 180TJ/d.

Over in Fairview, production has also increased as the Phase 2 infrastructure expansion project progressed. This includes the installation of additional gas and water gathering lines, construction of a gas plant and a reverse osmosis plant, as well as additional water disposal ponds and infrastructure.

Seven development wells were drilled in the September quarter as part of an ongoing program designed to underwrite future production and reserves growth.

Origin added that construction of the Talinga gas plant and water handling facilities were well advanced with the first stage of the plant completed and in commissioning.

The second stage of the plant, which will have a capacity of 90TJ/d is also progressing with compressor and cooler pads completed.

The company also drilled 22 development wells at Talinga-Orana during the quarter while a further six development wells were brought online, bringing the total up to nine wells producing a total of 9TJ/d.

Lastly, Origin drilled 18 development wells in the Lauren and Argyle fields and also commissioned the Kenya sales gas plant.
Wednesday, 28 October 2009

PNN

CSG lags cut into WDS’s outlook

2009-10-28T21:08:00.000-07:00

START-UP delays in Queensland’s coal seam gas sector have forced contractor WDS to cut its net profit guidance for the 2010 financial year.

While the mining sector results remain strong, expected project movement in the CSG sector will come later rather than sooner for WDS.

The company cut its outlook from a market consensus net profit after tax of $A26 million to $22-24 million.

“We have positioned WDS to be a major player as CSG is developed and brought to markets, which every informed observer is predicting will happen over the next decade,” WDS chairman Jim McDonald said.

“The present necessary planning phase is, however, becoming more protracted than was first anticipated, and work we had expected to be doing during the financial year ending June 2010 now seems to be slipping into 2011.”

WDS said it did not believe the cut would affect its overall medium-term financial outlook.

Shares in WDS fell 12.38% by midday to $1.80.

Wednesday, 28 October 2009
PNN
http://www.petroleumnews.net/StoryView.asp?StoryID=1038070

BG picks up pace for QCLNG

2009-10-28T21:07:00.001-07:00

BG Group has continued to make inroads in the development of its Queensland Curtis liquefied natural gas project with more than 150 wells drilled this year.

In the company’s third quarter results conference call last night, chief executive officer Frank Chapman said the company had made good progress with the project, with work moving ahead towards sanction in 2010.

“Good progress towards sanction is being made, with more than 150 wells drilled this year, tendering underway for the pipeline material and construction contracts, and front-end engineering and design for the upstream facilities and LNG plant progressing to plan,” he said.

In August, the company released the project’s environmental impact statement for public consultation and is expecting a decision from the Queensland and Australian government authorities next year.

QCLNG will use coal seam gas as feedstock to produce 7.5 million tonnes per annum of LNG under the first phase of development.

The project will expand the CSG production of BG subsidiary Queensland Gas Company in the Surat Basin, and transport the gas via a 380-kilometre underground pipeline to an LNG plant and export facility on Curtis Island, near Gladstone.

A final investment decision for the project which has a total planned capacity of up to 12 million tonnes per annum of LNG is expected in 2010.

Meanwhile, the company reported its capital investment in Australia for the quarter totalled £55 million ($A100 million) while the company’s total operating profit dropped 38% from the same period last year to £856 million ($A1.559 billion) due to a 41% drop in oil prices and a 62% drop in Henry Hub gas prices.

Net income in the third quarter dropped to £484 million ($A882 million) from £857 million a year earlier.

In exploration and production, total operating profit for the quarter was £435 million ($A793 million) as higher production volumes and the favourable effect of a stronger US dollar partially offset the lower oil and gas prices.

Production for the quarter was up 5% on the third quarter of 2008 at 56.6 million barrels of oil equivalent. However, this was about 2MMboe below the company’s exceptions for the quarter due to the delayed start-up of the Hasdrubal facility in Tunisia.

“These results demonstrate once again the strength of BG Group’s integrated gas business and this, together with current production levels around 700,000 barrels per day, up 12 per cent on fourth quarter 2008, provides us with confidence in the outlook for the group’s performance,” Chapman said.

“BG Group has assembled an array of material, long-life projects, and we are now entering a period where we can look forward to these projects driving exceptional growth to the end of the next decade.”

The company also announced that for the 2010 financial year, it will change the currency in which it reports its financial results to the US dollar.

Thursday, 29 October 2009
PNN
http://www.petroleumnews.net/StoryView.asp?StoryID=1038124