Origin site settled for LNG project
The Age
Wednesday August 19, 2009
ORIGIN Energy and ConocoPhillips have agreed to build their liquefied natural gas plant at Laird Point on Curtis Island after unsuccessfully jockeying for a better position further south on the island.The $35 billion Australia Pacific LNG (APLNG) joint venture will theoretically become neighbours with BG, Santos/Petronas and Shell, which have all announced plans to build separate plants on Curtis Island, off Gladstone, in Queensland.However, consolidation is expected in the sector. The Santos joint venture is still the only project to have submitted an environmental impact statement (EIS) to the Queensland Government.APLNG has released an economic analysis of the project by KPMG Econtech, which estimates that an annual average of 10,300 jobs will be created during the 10-year construction period, peaking at 18,600 direct and indirect jobs from 2012 to 2015. APLNG expects to submit its EIS early next year.Origin managing director Grant King said the four-train APLNG project should not be dismissed, citing the recent announcement of a 52 per cent increase in proved and probable reserves as proof of its potential size and quality."With the largest coal seam gas reserves in the country, the announcement of the site for the APLNG plant at Laird Point is another significant milestone in the development of the project as we move towards a final investment decision proposed for the end of 2010, and the first production train, which is planned to be completed by the end of 2014," he said.Deutsche Bank analyst John Hirjee said in a client note that the Laird Point site would require APLNG to undertake extra work to bring the project to completion."Given the site's location, we expect more dredging will be required relative to competing projects."While the site is not optimal, given a lack of recent milestones we see today's announcement as a positive for the APLNG project," he said."We continue to see the risk of delays to this timeline given Origin was the last project to be announced and has the shortest development timeline," Mr Hirjee said.Origin shares fell 2.5 per cent, or 39, to $15.
© 2009 The Age
