Australia Pacific LNG

Image Source : ConocoPhilips Australia – Australia Pacific LNG
Location : Curtis Island, Gladstone

Australia Pacific LNG is a joint venture between Origin Energy (37.5%), ConocoPhillips (37.5%) and Sinopec (25%). Origin operates the gas fields, upstream production and pipelines, whereas ConocoPhillips operates the LNG production, sales and export. The company claims to be the largest producer of natural gas sourced from coal seams in eastern Australia, this includes domestic gas supply as well as LNG exports. Coal Seam Gas (CSG) is the methane gas formed and trapped within coal, created through geological heating and compression of plant matter over millions of years.

The state of Queensland issued environmental approval for Australia Pacific LNG in November 2010, leading to arrival of the final investment decision (FID) for the project in July 2011. Australia Pacific LNG signed 20-year Sales Purchase Agreements (SPA) with Sinopec for 7.6 MMTPA and with Kansai Electric for approximately 1 MMTPA. CSG would be sourced from the company’s substantial resources in the Surat and Bowen Basins and delivered to the plant via a 530-kilometre gas transmission pipeline.

The site selected for the facility is located on the southwest side of Curtis Island, at Gladstone, Queensland, Australia on the edge of the Great Barrier Reef. Curtis Island is home to 3 LNG plants – Australia Pacific LNG, Gladstone LNG and Queensland Curtis LNG, which together represent investments of over $70 billion. Construction of the plant began in 2012, this included two LNG trains with combined capacity of 9 MMTPA, two LNG storage tanks of capacity 160,000 cubic metre each, a loading jetty for LNG ships and a control centre. In December 2015, the plant produced its first LNG, while the maiden cargo from the facility was dispatched aboard the LNG vessel – “Methane Spirit” on 9th January 2016. The second train began production of LNG in October 2016.

In the recent years abundant availability of gas has triggered off multiple plants being commissioned in United States and several other countries worldwide. This has led to oversupply in the LNG market, which when compounded with the high capital costs of Australian LNG plants and the excessive operating costs of the CSG fields, has raised serious questions on the competitiveness of LNG exports from Gladstone.1 Depletion of traditional east coast reserves, which catered to the domestic gas demand, now threatens diverting CSG from export to domestic use.2 In July 2017, the Australian Government introduced the Australian Domestic Gas Security Mechanism (ADGSM), which has the power to restrict LNG exports from Gladstone to protect local supply.3

Almost 15,000 personnel were employed during construction of the plant, whereas approximately 1000 operational jobs were created by the project. Australia Pacific LNG claims to commit to the highest standards of safety, community engagement, sustainable practices and research partnerships, and have invested more than $41 million into community support programs. The company’s community investment strategy focusses on education & training, community safety, health & wellbeing, natural resource stewardship, regional growth, liveability & rural resilience as well as academia & research. The company strives to improve opportunities for indigenous entities through employment, retention and career development of indigenous people, contributing positively to indigenous economic and social development, as well as promoting excellence in cultural heritage management.

Comprehensive environmental management plans have been initiated for weed control, waste management and water management. This includes treatment of the brackish water extracted from coal seams for beneficial use in agriculture, groundwater systems and environmental flow enhancement. Australia Pacific LNG is a founding member of GISERA – a research alliance established in 2011, which covers various issues in Queensland related to groundwater and surface water, biodiversity, greenhouse gases, land management, the marine environment and socio-economic impacts.

OWNERSHIP (Equity %)

ConocoPhillips 37.50%
Origin Energy 37.50%
Sinopec 25.00%

General Data

Estimated Capital Cost (USD)3 B Per Train
Plant TypeOnshore Modular
Plant StageOperating
Final Investment Decision (FID) Year2011 (Train 1)
2012 (Train 2)
FEED ContractorBechtel
EPC ContractorBechtel
No. of Trains / capacity2 Trains / 4.5 MMTPA each
Production Start Year2016
ProductsLNG, Domestic Gas
Gas TypeCoal Bed Methane (CBM)

Technical Data

Cooling Media Air
Liquefaction Technology CoP Optimized Cascade®
Refrigeration Train Details:
Propane Strings 1 & 2
Driver GE LM2500+G4 DLE (6-pack)
Aeroderivative Gas Turbine
Low Pressure (LP) Propane Compressor DMCL1004
GE (Nuovo Pignone)
Centrifugal Compressor
Medium Pressure (MP)/ High Pressure (HP) Propane Compressor 3MCL1404
GE (Nuovo Pignone)
Centrifugal Compressor
Ethylene Strings 1 & 2
Driver GE LM2500+G4 DLE (6-pack)
Aeroderivative Gas Turbine
Low Pressure (LP) Ethylene Compressor MCL1404
GE (Nuovo Pignone)
Centrifugal Compressor
High Pressure (HP) Ethylene Compressor MCL1007
GE (Nuovo Pignone)
Centrifugal Compressor
Methane Strings 1 & 2
Driver GE LM2500+G4 DLE (6-pack)
Aeroderivative Gas Turbine
Gearbox Double helical speed increasing gearbox
Low Pressure (LP) Methane Compressor MCL806
GE (Nuovo Pignone)
Centrifugal Compressor
Medium Pressure (MP) Methane Compressor MCL806
GE (Nuovo Pignone)
Centrifugal Compressor
High Pressure (HP) Methane Compressor 2BCL608
GE (Nuovo Pignone)
Radially Split Centrifugal Compressor
Power Generation 7 x Solar Turbines Titan 130 Gas Turbine Generators

Refrigeration Train Configuration

Key Facts

  • Ten all-electric compressor trains were ordered from Siemens in early 2011, for compressing low pressure gas from CSG wells up to the pipeline pressure, for onward transmission to the LNG plant. Each train incorporates two compressor skids – one low pressure and one high pressure and each skid carries two variable speed drive compressors. Each train has the capacity to transport gas at the rate of 84 mmscfd (million standard cubic feet per day).4
  • In October 2011, Sembcorp Marine owned, S.M.O.E. yard in Indonesia was contracted by Bechtel to assemble the process and cryogenic pipe-rack modules for APLNG through a $100 million contract. ALE was contracted for site transportation of the 69 modules, together weighing 43,000 tonnes. 29 sea voyages were undertaken from April 2013 to July 2015 to transport the modules from Batam, Indonesia to Gladstone, Harbour.5,6,7
  • In 2011, the engineering design contract for 3 CSG pipelines was awarded to KBR by McConnell Dowell/CCC joint venture (MCJV) on behalf of Queensland Curtis LNG (QCLNG) and Australia Pacific LNG (APLNG). 720 kms of high pressure X70-grade steel gas pipelines were laid from Surat and Bowen basins, using over 270,000 tonnes of pipes. This task helped MCJV earn the Excellence In Project Execution Award 2016 by International Pipe Line & Offshore Contractors Association (IPLOCA).8,9
  • In October 2013, APLNG and Gladstone LNG signed a gas-swap and infrastructure sharing deal to reduce costs, achieve operational efficiency, minimize additional infrastructure and help reduce carbon footprint.10
  • In 2016, Australia’s trade practices watchdog – Australian Competition and Consumer Commission (ACCC), conditionally allowed the LNG projects on Curtis Island to discuss and coordinate their maintenance schedules, providers and techniques for a period of 5 years in order to maximize efficiencies. To avoid undue advantage of maintenance shutdowns in the wholesale gas markets, ACCC required the plants to “publicly disclose maintenance schedule information that they share with each other”.11
  • CSG production releases considerable quantity of brackish water and requires desalination, which in turn produces brine. To avoid environmental damage, a pre-feasibility study was conducted to seek an effective brine management solution. Enhanced recovery RO and mechanical evaporators & crystallizers were utilized for deep well brine injection and pure salt recovery.12
  • Australia Pacific LNG signed supply agreement with SINOPEC for 7.6 MMTPA of LNG over 19 years (2016-2035) and with Kansai Electric Power Company for 1 MMTPA of LNG over 20 years (2016-2036). Both the agreements have FOB (Free-on-board) delivery formats.13
  • In November 2018, Queensland Curtis LNG and Australia Pacific LNG agreed to share infrastructure in gas supplies by way of a tolling agreement commencing from 2020 to 2035 with a possible extension till 2049.14
  • In November 2011, Bechtel awarded an over $100 million contract to John Holland, for the design & construction of a 168-metre jetty for APLNG. The ship loading facility can accommodate two LNG ships ranging in capacity from 125,000m3 to 220,000 m3 each.15
  • In October 2016, the first vessel for transporting LNG for Sinopec from APLNG, was delivered. The 174,100m3, dual fuel diesel-electric vessel – CESI Gladstone, is the first ship in a fleet of 6 dedicated vessels ordered by the joint venture between China Energy Shipping Investment (CESI ) and Japan’s Mitsui OSK Lines (MOL).16
  • The APLNG project life has been estimated at 30 years, whereas the gas pipeline has a life-span of 50 years. During this period approximately 10,000 CSG wells will be drilled to monetize the 5 trillion cubic feet gas reserves.17,18
  • The FID of APLNG was delayed due to the Federal Government’s environmental approval. Traces of the banned chemicals – BTEX (benzene, toluene, ethylbenzene and xylenes) were found in 8 out of the 17 sanctioned exploration wells in October 2010. Subsequently, the 17 wells were shutdown and fresh explorations were conducted.18

Source:

1. Robertson B. ‘Australia’s Export LNG Plants at Gladstone: The Risks Mount’, Institute for Energy Economics and Financial Analysis Website, June 2017
2. Browne N. ‘LNG Changes Everything For Australia’s East Coast Gas Market’, Forbes Website, 12 July 2018
3. ‘Australian gas shortages loom as LNG exporters and domestic consumers compete for supply’, Wood Mackenzie
4. ‘Siemens to deliver compression solutions for gas gathering in Australia’, Siemens Website, 24 March 2011
5. ‘SMOE Bags APLNG Contract’, LNG World News Website, 18 October 2011
6. ‘First APLNG Modules Arrive in Gladstone’, LNG World News Website, 3 April 2013
7. ‘ALE Completes Work On Australia Pacific LNG Project’, ALE Heavy Lift Website, 8 July 2015
8. ‘KBR Wins Engineering Design Services Contract for APLNG, QCLNG Pipelines’, LNG World News Website, 2 June 2011
9. ‘Australia Pacific LNG Pipelines Project, Australia’, IPLOCA Website, May 2016
10. ‘GLNG and Australia Pacific LNG sign upstream cooperation deal’, Santos Website, 25 October 2013
11. ‘ACCC authorizes coordinated LNG facilities maintenance on Curtis Island’, LNG World News Website, 14 April 2016
12. Brannock M. et al. ‘Brine management of coal seam gas water: Pure salt recovery & other methods’, Oz Water Conference, Adelaide, Australia, May 2011
13. ‘The LNG industry GIIGNL Annual Report 2018’, GIIGNL Website, 2018
14. ‘Australia Pacific LNG to share infrastructure and secure additional gas supply to diversify portfolio’, Australia Pacific LNG Website, 5 November 2018
15. ‘John Holland Secures Subcontract for Australia Pacific LNG Jetty’, LNG World News Website, 17 November 2011
16. ‘Hudong-Zhonghua delivers APLNG-dedicated tanker’, LNG World News Website, 1 November 2016
17. Evans R. ‘Australia Pacific LNG –CSG Production’, Qld Petroleum Exploration Association, 11 February 2014
18. Kelly L. ‘Australia’s Emerging CBM LNG Industry’, Japan Oil, Gas and Metals National Corporation (JOGMEC) Website, January 2011