GLNG site tour on Curtis Island.
GLNG site tour on Curtis Island. Brenda Strong

Gladstone's LNG projects on track to deliver gas next year

Find out what the projects are costing

Santos GLNG last to receive shipment of modules

APLNG storage tank roofs will go up

THEY'VE survived unprecedented storms, cost blow-outs, and a skyrocketing Australian dollar, but Gladstone's LNG projects are on track - and will deliver first gas from next year.

QCLNG, GLNG and APLNG are all marking increasingly frequent milestones on their huge construction sites on Curtis Island.

But controversy around coal seam gas, the high Australian dollar and falling international gas prices continue to cloud the industry.

This week, oil and gas peak body the Australian Petroleum Production and Exploration Association (APPEA) held its conference in Brisbane.

Chair David Knox urged the industry to respond to the challenge of remaining competitive in the expanding global LNG environment.

"We must ... prioritise efforts to collaborate, to share infrastructure, and to deliver economies of scale," Mr Knox said.

GLNG site tour on Curtis Island.
GLNG site tour on Curtis Island. Brenda Strong

Gladstone's three LNG proponents have already experienced cost overruns on their multi-billion dollar projects.

The QCLNG project is now costing $20.4bn, a blow-out of 36%.

Santos GLNG saw a 15% cost overrun to $18.5b and APLNG revised project figure sits at $24.7b, up 7%.

APLNG project chief executive Page Maxson said Australia's exchange rate was just one factor behind project cost overruns.

Investor confidence in the industry appears to have dampened in the past 12 months, with three more LNG projects in Australia under threat.

It's feared operators could shelve plans to build the $20b Arrow plant on Curtis Island, along with two Western Australian projects.

But when asked whether APLNG would consider working with Arrow to expand its current project, Mr Maxson declined to comment.

A new report this week revealed if the gas industry is able to thrive in Australia, it has the capacity to deliver 150,000 jobs through $180 billion in spending.

The cost

  • QGC - now costing $20.4b, overrun 36%
  • GLNG - now costing $18.5b, overrun just over 15%
  • APLNG - now costing: $24.7b, overrun 7%

Santos GLNG last to receive shipment of modules

DEVELOPERS of the Santos GLNG project claim they were the first to show interest in developing on Curtis Island, but this week the company became the last of the three LNG proponents to receive a shipment of its own modules from overseas manufacturers.

On Tuesday, four of the expected 111 prefabricated steel structures arrived at Curtis Island from Santos' module yard in Batangas, Philippines.

This comes about a month after APLNG received four of its expected 69 modules from Indonesia and almost nine months after QGC received its first six modules from Thailand.

Construction has well and truly ramped up across all of our sites as we ready our project for first LNG in 2015.

Santos GLNG also marked a milestone this week when two cold boxes were installed in the plants' second train.

The cold boxes act as refrigerators in a process to cool the coal seam gas (CSG) to liquefied natural gas (LNG).

A 591-tonne carbon dioxide absorber, which removes traces of carbon dioxide from the CSG, was joined to the cold boxes.

The process involves cooling the CSG to a compressed and more compact version of LNG at -161C.

Santos vice president downstream GLNG Rod Duke said the site would be ready to export LNG to international markets by 2015.

"Construction has well and truly ramped up across all of our sites as we ready our project for first LNG in 2015," Mr Duke said.

The roof of one of the two LNG storage tanks is also nearing completion, with the raising of the roof under low pressure air to be completed during the third quarter of the year.

Mr Duke said Santos GLNG project was on schedule. This comes after its $18.5bn project has seen cost overruns of over 15%.

APLNG storage tank roofs will go up

APLNG has marked more progress on its Curtis Island project, with chief executive Page Maxson anticipating the raising of the LNG storage tank roof this month.

The milestone is expected to coincide with neighbouring site GLNG, which will also raise one of the roofs of its two LNG storage tanks in the third quarter of the year.

QGC has already completed one of its LNG storage tanks.

More than eight modules have already arrived on the APLNG site. "The project's CO2 absorber has also been set in place," Mr Maxson said.

There are about 2300 people working on the island at present, but during the workforce peak APLNG will see between 2600 and 2800 people on site.

In operation, the workforce will drop to 175 people.