BG Group opts for competitive FEED on QCLNG-2
The London-listed BG Group plc (BG) has decided to organize competitive bids on the front end engineering and design (FEED) for the expansion of its giant Queensland Curtis LNG (QCLNG) project in the Southeast of Australia.
In its first phase, the QCLNG project was the first one to be sanctioned with a final investment decision (FID) to produce liquefied natural gas (LNG) out of coalbed methane (CBM) fields in the Curtis Island, offshore the Queensland State in the southeast of Australia.
BG decision to move on the QCLNG project phase-2 is following the binding signature last May with the China National Offshore Oil Corporation (CNOOC) on an extended partnership in the Queensland Curtis LNG project.
This agreement is sealing the companies on the Heads of Agreement (HOA) inked in October 2012.
By this agreement, CNOOC is increasing its shares in the QCLNG project and is committing to more than double its purchase volume of LNG as the main customer for the QCLNG project.
According to the terms of this agreement, CNOOC:
- Ramped up its working interests in QCLNG Train-1 from 10% to 50%
- Committed to purchase a total of 8.6 million t/y of LNG instead of the previously 3.6 million t/y
- Owns 25% interests in the Walloons Fairway BG Blocks of the CBM Surat Basin and Bowen Basin in Queensland
- Invests jointly with BG in two additional LNG carriers
While CNOOC will not have any interest in QCLNG Train-2, this agreement opens the option for CNOOC to take 25% interest in one of the LNG trains to be added in the Queensland Curtis LNG expansion project
Based on this agreement BG could make the decision to speed up the Queensland Curtis LNG Project Phase-2 with a competitive FEED.
QCLNG Phase-2 Project pre-FEED completed in July
From the Heads of Agreement signed in October 2012 with CNOOC, BG could anticipate on the opportunity to proceed with the QCLNG expansion project.
Therefore BG organized a competitive pre-front end engineering and design (pre-FEED) between six engineering companies, typically Amec, Bechtel, CB&I, Clough, Fluor and WorleyParsons.
This pre-FEED work should be completed by July 2013.
From this pre-FEED competition, BG will select two engineering companies to continue on a competitive FEED.
In 2014, BG will convert the contract of the competitive FEED winner into an engineering, procurement and construction (EPC) contract.
For this QGLNG Phase-2 project, BG intends to replicate the QCLNG Trains 1 and 2 architecture with the Trains 3 and 4 combined capacity of 8.5 million t/y of LNG.
The QCLNG expansion project should benefit from the existing 540 kilometers inlet gas pipeline, LNG storage facilities and marine offloading jetty for the LNG carriers.
So this QCLNG phase-2 project should include:
- LNG Trains 3 and 4
- Gas treatment facility
- Water treatment facilities
Although BG estimates its resources in-place to 29 trillion cubic feet (tcf), mostly in the Surat Basin of Queensland State, BG is continuing its exploration campaign for CBM in the Owen Basin.
In addition BG started to test resources for shale gas and tight gas in the Cooper Basin.
With these new discoveries in the Bowen and the Cooper Basins BG secured enough resources to feed the third train of the Queensland Curtis LNG phase-2 project.