BG Group approves $15 billion Australian LNG project

SYDNEY (BestGrowthStock) – British energy corporation BG Group said on Sunday it had given final approval to a $15 billion project to develop a major new liquefied natural gas project in northeastern Australia.

Chief executive Frank Chapman said the Queensland Curtis Liquefied Natural Gas project would include the world’s first LNG plant to be supplied by coal seam gas and was “the foundation project at the center of a major new Australian export industry.”

The project will involve a 540-kilometre pipeline to move gas from the Surat Basin in southern Queensland, where coal seam gas is already being produced and production will be expanded.

A new two-train LNG plant will be built on Curtis Island, near the port of Gladstone, which will become the port of export for the gas.

The government welcomed the decision, saying it would create 5,000 jobs during construction and 1,000 permanent positions, boost Australia’s foreign direct investment by 11 percent and exports by around A$4 billion ($3.9 billion) annually.

“It marks an important and exciting leap ahead in the development of Australia’s vast coal seam gas reserves – reserves that in Queensland alone are estimated to be enough to power the whole state for more than 500 years,” Treasurer Wayne Swan said in a joint statement with Resources and Energy Minister Martin Ferguson.

BG Group said it “will progress development and construction” immediately. Development is due to start next year and scheduled to run until 2014. First exports are expected the same year, the company said.

The project will be operated by BG Group’s Australian subsidiary, QGC Pty Limited. Purchase agreements are already in place with Chile, China, Japan and Singapore, the company said.

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

(Editing by Sanjeev Miglani)

BG Group approves $15 billion Australian LNG project