APLNG finally sends first cargo

BETTER late than never, Australia Pacific LNG’s first shipment has finally departed Curtis Island – but ICN sister publication Energy News can confirm it's not the Sinopec one that was reported to have been delayed, costing the Chinese giant.
APLNG finally sends first cargo APLNG finally sends first cargo APLNG finally sends first cargo APLNG finally sends first cargo APLNG finally sends first cargo

An aerial view of GLNG, APLNG and QCLNG on Curtis Island.

Anthony Barich

Upstream operator Origin Energy announced yesterday morning that Methane Spirit departed Curtis Island near Gladstone on Saturday, despite the project starting production early last month.

That makes four of six production trains now online across three LNG projects on Curtis Island.

Reuters reported last week that ship tracking on its Eikon service revealed that Sinopec's chartered LNG tanker BW Pavilion Vanda arrived at the Gladstone anchorage on December 18 but was yet to load a cargo.

A source told the news agency that the demurrage costs would exceed $US500,000 for Sinopec.

Energy News understands that while BW Pavilion Vanda was the intended vessel for APLNG's first cargo, various timing issues meant the Methane Spirit would be the one, taking the gas to either China, Japan or another Asian destination as part of one of a few short-term off-take agreements signed last year.

Origin still has a Sinopec cargo scheduled for January, so the vessel could still take the first cargo to China this month.

There will be a mixture of short-term off-take cargoes and a spattering of long-term off-take cargoes of the next few months leaving Gladstone from APLNG.

Off-take agreements have been signed for 7.6 million tonnes of LNG for 20 years to joint venture partner Sinopec, and 1MMtpa for 20 years to Japanese player Kansai Electric.

Origin managing director Grant King said this morning’s announcement had been more than seven years in the making with partners ConocoPhillips and Sinopec.

Seeming to hint at the delays in sending the $24.7 billion project’s first cargo, King said “these are incredibly large, complex projects and exporting the first cargo is a tremendous achievement for the Origin team that led delivery of the upstream operations, and the ConocoPhillips team that led delivery of the downstream operations”

Once both of its two production trains are fully operational, APLNG will have a nameplate capacity of 9 million tonnes per annum of LNG, with about 8.6MMtpa committed under long term take-or-pay contracts with Sinopec in China and Kansai in Japan.

APLNG produces natural gas from Australia’s largest 2P CSG reserves base in Queensland’s Surat and Bowen basins, which is piped 530km to its LNG facility on Curtis Island where it is converted to LNG for export to customers in Asia.

King acknowledged the contribution of more than 15,000 workers, as well as the support of our customers, landholders, communities, suppliers and governments at the local, state and federal level – “without which we would not have reached this milestone today”

Bechtel, which constructed the LNG projects, said the simultaneous work on the three giant plants constitute the greatest concentration of greenfields construction for the company anywhere in the world.

Bechtel officially handed over operational control of the QCLNG plant to BG Group subsidiary QGC in November, and in October the Santos Gladstone LNG project produced its first cargo from Train 1.

They will contribute to the $1.2 billion that LNG revenue will provide in royalty payments over the next four years, according to the Australian Petroleum Production and Exploration Association.

Australia shipped 25MMt of LNG cargoes in 2014-15, earning $16.9 billion in export revenue.

By 2019-20 when all seven LNG projects developed in recent years are fully operational, there will be a projected combined export volume of just over 76MMt.

The latest national accounts figures show the stronger-than-forecast growth rate of 0.9% was driven largely by resource exports, and led by an 11.4% increase in oil and gas production.