Australia Pacific LNG project set to start production within a month and ship cargo

Tuesday, 10 November 2015

Origin also revealed that it was now making money from supplying coal-seam gas to the Queensland Curtis CSG-to-LNG plant, one of two others built alongside the APLNG plant on Curtis Island in Queensland.

The APLNG project company sells CSG to Queensland Gas Co., the upstream operator for BG Group of the UK, the QCLNG plant owner. This supply is part of joint feed-gas sharing accords.

Origin said production for the latest quarter was up 13 per cent compared with the June quarter, “reflecting increased production as Australia Pacific LNG ramps up ahead of first LNG cargo.”

When compared to the same quarter a year ago, production increased by 37 per cent primarily reflecting higher production from APLNG as gas fields ramp up ahead of the commencement of LNG production.

“Notwithstanding the strong increase in production, revenue decreased by 1 per cent compared to the June Quarter due to lower liquids prices and lower average gas prices realised by APLNG. Gas prices, excluding APLNG and gas sales to QGC, continue to increase,” Origin said

“The price of ramp gas realised during the quarter increased compared to the June quarter as a result of increased gas demand as Queensland LNG projects ramp up and commence production of LNG,” it added.

“The price of the increased volumes sold to QGC continues to reflect the linkage to low oil prices during the Quarter and the fixed component which allows QGC to recover a return on capital invested in its export project.

Fields are currently operating below their full production capacity as wells are being turned down to meet domestic demand without jeopardising the capacity build required for Downstream LNG Train 1,” Origin said.

Origin's overall quarterly revenue decreased 10 per cent to A$224.5 million (US$159.5M) compared with A$250.5M in the same quarter of 2014.

Origin Chief Executive for Integrated Gas, David Baldwin, said: “During the quarter we welcomed the commencement of production from the new Yolla 5 and Yolla 6 wells, and APLNG production continued to ramp up ahead of first LNG cargo, driving a strong operational result.

“We are on the cusp of achieving two major milestones at APLNG with the commencement of LNG production expected within a month, and first LNG cargo within a few weeks thereafter.”

Origin and ConocoPhillips each own 37.5 percent of the APLNG project on Curtis Island in Queensland, with China's Sinopec holding the remaining 25 percent of the shares.

The APLNG when it begins operations will supply regular LNG shipments to China and Japan.