Total and its partners Santos (operator), Petronas and Kogas announce the sanction of the Gladstone Liquefied Natural Gas (GLNG) project in Australia, representing a US$16 billion investment. The GLNG project consists of the development of coal seam gas fields, the construction of a 420 kilometres gas transmission pipeline and of a 7.2 million tonne per year (t/y) liquefaction plant.
Total expects to begin LNG production in 2015 and plateau production of the LNG plant is expected to be reached in 2016 for more than 20 years, the French oil major said in a statement.
The signature of binding LNG off-take contracts with Petronas and in December 2010 with Kogas, secures an annual off-take of 7 million tonnes of LNG, the statement added.
“Total is delighted to work alongside Santos in this project, an operator that has demonstrated its expertise in producing coal seam gas since 2002, and to bring its know-how in managing large LNG projects. The involvement of Petronas and Kogas, main buyers of the produced LNG, also strengthens the project,” declared Yves-Louis Darricarrère, president of Exploration & Production, Total.
“Total considers this integrated LNG project as a good application of its strategy to remain a leading LNG player and to strengthen its portfolio of unconventional gas.
Through this project, Total increases its presence in Australia and its access to the Asian LNG market, the fastest growing market offering high value prices linked to oil.”
The GLNG project
The integrated LNG project consists of extracting coal seam gas from the Fairview, Arcadia, Roma and Scotia fields, located in the Bowen and Surat Basin in Queensland, eastern Australia. The fields’ resources are estimated at over 250 billion cubic metres (9 trillion cubic feet) of gas. The Fairview field already produces 3.1 million cubic metres (110 million cubic feet) a day for the local market. The partners of the GLNG project will develop their share of these fields to reach a production plateau of 9 billion cubic feet per year, i.e. 900 million cubic feet per day (41,000 barrels of oil equivalent per day in Total’s share).
Last September, Total acquired a 20% interest, increased to 27.5% in December when Kogas joined the project. Partners on the project are now Santos, the operator, with 30%; Petronas, 27.5%; Total, 27.5%; and Kogas, 15%.
Total Exploration and Production in Australia
Total E&P has been present in Australia since 2005 and has interests in 10 offshore licenses — four of which it operates — in the Browse, Vulcan and Bonaparte Basins in the northwest shelf.
In the Browse Basin, Total has a 24% interest alongside Inpex in the Ichthys LNG project.
Preparations are advancing for the development. Front-end engineering and design (FEED) began in 2009 and the first tenders have been launched in 2010. The project will produce 8.4 million t/y of LNG, around 1.6 million t/y of liquefied petroleum gas, and around 100,000 barrels of condensate per day. The final investment decision is expected to be taken by the end of 2011, and the field should be brought on stream by the end of 2016.
Total and LNG
Total is active in most of the major LNG producing regions as well as main LNG markets such as its production hubs in Indonesia, Qatar, the United Arab Emirates, Oman, Nigeria, Norway and Yemen.
The start up of Yemen LNG and Qatargas 2 Train 5 has increased Total’s LNG production by around 40% in 2010. Angola LNG, which is currently under construction, will complement this portfolio in 2012.
The Group also secured long-term access to LNG re-gasification capacity located in key LNG markets: North America (Sabine Pass in the United States and Altamira in Mexico), Europe (Fos Cavaou in France and South Hook Terminal in the United Kingdom) and Asia (Hazira in India).
