BG Group has approved its biggest ever investment, a
£9.3bn ($15bn) liquefied natural gas (LNG) development in north east Australia.
The project will involve building a 540km pipeline to
transport coal seam gas from where it will be extracted to its processing
plant.
BG said on Sunday that the investment was a
“milestone” in its expansion.
The UK company’s decision comes after the Australian
government gave environmental approvals last week.
The Queensland Curtis Liquefied Natural Gas project will
be the first plant in the world to convert coal seam gas into LNG.
The intention is to produce 8.5 million tonnes of LNG
annually – the equivalent to about 10% of all of the gas used in the UK each
year.
The LNG – gas cooled to a liquid to aid transportation –
will mainly be sold in Asia, with the first exports planned for 2014.
BG already has customers in China, Japan, Singapore and
Chile lined up to buy the LNG.
The final clearance for the project comes after almost
three years of regulatory and public hearings to assess the environmental
impact.
Coal seam gas is the natural gas that occurs when coal is
formed deep underground. It becomes trapped in coal seams by water pressure.
It is extracted through wells and processed to remove the
water, before being piped to a compression plant where it is converted in LNG
for transportation around the world.
Frank Chapman, chief executive of BG Group, said in a
statement: “Today… we are announcing our decision to develop the world’s
first LNG plant to be supplied by coal seam gas and the foundation project at
the centre of a major new Australian export industry.
“Today’s sanction is also a significant milestone on
the road to delivery of the group’s growth agenda over the decade ahead.”
The Australian government welcomed BG’s decision, saying
that the project would create 5,000 jobs during construction and 1,000
permanent positions.
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