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QCLNG starts operations from second train

World Coal,

Commercial operations have begun from the second train at BG Group’s Queensland Curtis LNG plant (QCLNG), after BG Group’s Australian subsidiary, QGC Pty Ltd, assumed control of the facility from Bechtel Australia, which built the facility.

BG Group now have full control of both LNG trains and associated facilities at QCLNG and will ramp up production to a combined 8 million tpy – or enough LNG to load around ten vessels per month – by mid-2016. Since production began from the first train in December 2014, QCLNG has shipped 71 cargoes.

The QCLNG facility if fed by coalbed methane (CBM: known as coal seam gas in Australia) from the Surat Basin in Queensland and is the world’s first project to turn CBM into LNG.

“As we assume full control of the entire QCLNG plant, we remain focused on managing the facility safely and responsibly,” said Helge Lund, BG’s CEO. "With both trains now fully operational, QCLNG adds significant volumes and flexibility to our LNG shipping and marketing portfolio."

QGC recently announces a further AUS$1.7 billion investment in the Queensland CBM industry, involving the construction of between 300 and 400 new wells, a large field compression station and associated pipelines and facilities.

The partners in Train 2 are BG Group (97.5%) and Tokyo Gas (2.5%), which is also a foundation customer.

The Australian LNG industry is facing a squeeze as global LNG suppliers surge ahead of demand, hitting prices. “The downturn is at 400 days and counting, well over double the previous downturn in December 2008 which was about 150 days,” Geoffrey Cann, Deloitte Australia’s National Director, Oil and Gas, told the Queensland Petroleum and Exploration Association.

“But pricing hasn’t turned around yet and all the signs suggest that we won’t see a reversal anytime soon,” Cann continued, warning that Australian costs – currently around 30% higher than international standards – would need to be cut to attract new investment.

The industry also remains controversial with independent Senator, Glenn Lazarus, an outspoken critic of the CBM industry in Australia, gaining Senate support for establishing a select committee to investigate the impact of CBM and other unconventional gas extraction on rural communities.

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