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KEEPING up with the movements in the latest developments in the Liquefied Natural Gas industry is like keeping your eye on the pea in the pea under the shell game.
Yesterday the Malaysian state oil company (PETRONAS) bought a 40 per cent stake in a proposed liquefied natural gas plant (Gladstone Liquefied Natural Gas or GLNG) to be built on Curtis Island.
The company purchased its $2.5 billion share from Australia's Santos Ltd - the third largest gas and oil producer in Australia.
The new joint venture to be operated by Santos proposes to build an initial one train gas liquefaction facility on Curtis Island.
The project will take coal seam gas (CSG) by pipeline from the Bowen basin and pipe it to Gladstone for export mostly into south east Asia.
Gladstone and its harbour have become a focal point in the rapidly developing liquefied natural gas industry with five companies now in the business of proposing to build plants in the city.
In this new joint venture PETRONAS made an initial payment to Santos of $2 billion and will make a further payment of up to $500 million upon a final investment decision approval for a second LNG train.
PETRONAS is considered a leading player in the global LNG industry with more than 25 years experience in the industry and successful projects in Malaysia and Egypt.
It is the first time the Malaysian company has invested in Australia.
The Santos GLNG project has received significant status approval from the Queensland Government and is now in the pre-front end engineering stage.
The final investment decision is expected by the end of 2009 while the first LNG cargoes are predicted for 2014.
Both the Surat and Bowen Basins will supply coal seam gas to five companies planning to set up in Gladstone.
The Surat Basin is alleged to have some of the finest coal seam gas supplies in the world and combined the basins had more gas that the giant West Australian North west shelf project.
Origin is believed to have 10,000 petajoules in reserve. It is also predicted that gas prices on the east coast customers will double by the year 2010.
Santos or GLNG plans to export about 4 million tonnes upon completion of its Gladstone plant.
The Gladstone plant is expected to cost almost $8 billion in today's dollars to build.
