Cuts, sales and delays for LNG projects

The shake-up in the Australian LNG industry continues with reports that start-up for the Queensland Curtis LNG plant at Gladstone has been delayed and Royal Dutch Shell cutting hundreds of jobs at its proposed Arrow LNG project and selling its stake in the Wheatstone LNG project.

BG Group told journalists that the first exports from its $US20.4 billion ($23.5bn) Queensland Curtis LNG plant at Gladstone are now expected in the final quarter of 2014.

“That reflects the complex and extended start-up process that we need to go through for the plant,” BG chief executive Chris Finlayson said. “The good news is we have substantially de-risked this (project) through completion of the pipeline and the delivery of gas to the island.”

Coal seam gas flows into the QCLNG project are expected to reach 200 terajoules per day by the middle of 2014 and then increase to 600 to 700 terajoules when the plant starts exporting.

“We are confident that our upstream development plan is on track to meet this demand,” Mr Finlayson said.

Meanwhile, the viability of the Arrow LNG project is in doubt with the Australian reporting that Shell and PetroChina, who recently announced that they will not build a fourth $20bn LNG project on Curtis Island to export their large Arrow gas resource, cutting around 250 jobs from the project and selling their stakes in the Wheatstone LNG project to the Kuwait Foreign Petroleum Exploration Company.

The sale of Shell’s stakes, which saw the transfer of a 6.4 per cent interest in the Wheatstone LNG project and an 8 per cent stake in the Wheatstone and Iago gas fields, went through at $US1.135 billion ($1.3 billion).

If this trend continues, as many commentators believe it will, it may result in sweeping change across the Australian LNG industry. It may not all be doom and gloom however, while these large international companies look to reign in their investments others hope to see opportunities open up where they left off and various national companies seem keen to swoop in and procure their interests.

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