British gas giant BG Gas and its chief contractor Bechtel have claimed a world first, successfully converting natural gas from coal seams to liquefied natural gas, ready for export from BG's Queensland Curtis LNG (QCLNG) project off Gladstone in Queensland.
An LNG tanker, the Methane Rita Andrea, docked at Curtis Island on December 27 and started loading the inaugural cargo the next day. The LNG cargo will be the first to be exported in Queensland's history and marks the start of a massive expansion of the state's gas sector.
Two more projects on Curtis Island - Total's GLNG and Origin Energy's APLNG - are expected to produce first gas for export in 2015.
Together, the three Curtis Island plants will account for roughly 8 per cent of global LNG production. Gas will be exported to China, Japan, Korea,Malaysia and elsewhere in Asia.
Andrew Gould, interim executive chairman of BG, hailed the milestone at the $25 billion QCLNG project. "This is an immense achievement which demonstrates the company's ability to deliver a highly complex LNG project," he said in a statement. "The ongoing support from both the State Government of Queensland and the local councils of our upstream region and in Gladstone has also been pivotal in this development."
Bechtel global LNG general manager Alasdair Cathcart, who is overseeing the construction of the three Curtis Island projects simultaneously, said the completion of the three projects will "certainly be listed as one of Bechtel's greatest achievements in our 116-year history when they are completed in 2016."
He said 6000 people had worked on the QCLNG in the lead up to the first cargo."The significance of this milestone cannot be underestimated. It's a fantastic achievement that has been achieved by a fantastic team," Mr Cathcart said.
The second cargo of LNG from QCLNG will be loaded onto a second ship, the Methane Mickie Harper, which is expected in Gladstone in the first week of January.
QCLNG will eventually produce 8 million tonnes of LNG when a second gas "train" comes online in the third quarter of 2015.
Mines Minister Andrew Cripps said he was not perturbed by soft commodity prices."They are notoriously volatile," he said on Tuesday. "I'm confident that this will be a fantastic opportunity for the state for decades to come because the size of the investment is very significant. Royalties that would eventually flow to the state would be "in the billions of dollars", he said.
Queensland Resources Council chief executive Michael Roche said Queensland would be a major player in the global LNG market producing 25 million tonnes a year by the end of 2016. Royalties that would eventually flow to the state would be "in the billions of dollars", he said.
Queensland Resources Council chief executive Michael Roche said Queensland would be a major player in the global LNG market producing 25 million tonnes a year by the end of 2016.
The start-up of QCLNG also marks the start of a wave of LNG projects around Australia. As well as the Queensland projects, Chevron is constructing the $US54 billion Gorgon project in Western Australia, and the Wheatstone project in the same state.
Inpex Corporation's $US34 billion Ichthys venture in Darwin is also due to complete construction in late 2016, while Shell's innovative Prelude floating LNG venture in the Browse Basin is scheduled for start-up in 2016 or 2017.
Australia is expected to pass Qatar as the world's biggest LNG exporter by around 2018.
But this wave of LNG development comes as oil prices slump around the world. This has pushed down benchmark prices of LNG by more than 40 per cent since the start of 2014.