The tanker that will make history by shipping Queensland's first cargo of liquefied natural gas has arrived in Gladstone, confirming that the start-up of BG Group's $US20.4 billion ($25 billion) LNG project is just days away.
The ship, the Methane Rita Andrea, arrived off the coast of Gladstone on Monday and is waiting outside the harbour to complete regulatory procedures and until the Queensland Curtis LNG venture is ready to start loading from Curtis Island.
A BG spokesman in Brisbane and the Gladstone Port Corporation both confirmed the tanker had arrived.
BG's project will be the first of the three rival LNG projects in Queensland to start shipments, with production due to start this month. The British gas major has not given an exact date for production to start or for the ship to sail away. The start-up is also significant on a world scale given the Queensland plants are the first in the world to produce LNG for export from gas extracted from coal seams rather than conventional fields.
Queensland's other two LNG projects are also due to begin exports within the next 12 months, turning the state suddenly into a major player in the gas export scene. Cargoes from the three projects, which represent more than $70 billion in investment in total, will be shipped to China, Japan, Korea, Malaysia and elsewhere in Asia.
All Australia's existing LNG exports are shipped from either Karratha, where both the North West Shelf venture and Woodside Petroleum's Pluto venture export gas, or from Darwin, used by ConocoPhillips' Bayu-Undan venture.
The start-up of QCLNG marks the first production from Australia's new wave of LNG projects, with seven currently under construction around the country. In addition to the three Queensland projects, Chevron's $US54 billion Gorgon venture is due to begin production on Barrow Island in Western Australia in the second half of next year, while Chevron's Wheatstone project is due to start up in late 2016. Inpex Corporation's $US34 billion Ichthys venture in Darwin is also due to complete construction in late 2016, while Shell's innovative Prelude floating LNG venture in the Browse Basin is scheduled for start-up in 2016 or 2017.
The unprecedented boom in LNG plant construction will result in a surge in Australia's export earnings from gas exports, despite the slump in crude oil prices this year. It will also turn Australia into the world's biggest exporter of LNG, probably by 2018, jumping ahead of current world leader Qatar.
However the start-up of QCLNG comes as LNG spot prices in Asia have fallen to their lowest level since before the Fukushima nuclear disaster in Japan in March 2011.
As of late November the benchmark LNG price for Japan and South Korea as measured by pricing service Platts was just $US10.20 per million British thermal units, down from about $US18 in January. The price weakness is in contrast to the typical upswing in prices going into the northern hemisphere winter. Consultancy EnergyQuest put the weak prices down to slowing Chinese growth and a continuing decline in imports by Korea. The start of production earlier this year at ExxonMobil's $US19 billion Papua New Guinea LNG project has also contributed.
"The start-up of PNG LNG has been a factor in driving down spot prices and as the Australian projects come on stream we expect that they will further depress spot prices," EnergyQuest said this month in a report.Source: The Sidney Morning Herald