Fisherman Landing LNG by LNG ltd looks familiar. These guys are talking the same staged development strategy and liquefaction costs as Gulf LNG. If they only had a big resource.
Prokect link: http://www.lnglimited.com.au/irm/content/project_australia.html
18 December 2012
The company said this total capital cost estimate was consistent with the its estimates in January of this year, as well as being materially the same as proposed in March 2010.
LNG Ltd chief technical officer Paul Bridgwood said the company was “very pleased that previous capital cost estimates are being confirmed, especially when most other LNG projects are having to contend with substantial cost increases.”
The escalated cost of developing LNG projects in Australia has been a hot topic recently, with labour shortages, logistical challenges and the strong Australian dollar all playing a part.
At the start of this month, US oil major Chevron added US$15 billion to its budget for the Gorgon LNG project on Barrow Island, off Western Australia.
Earlier in the year, delays in the start-up of Woodside’s Pluto project had resulted in a A$900 million cost blowout and the Inpex-operated Ichthys LNG project in the Northern Territory has been estimated to cost in the region of US$4000 per tonne of capacity.
LNG Ltd stated that its estimated capital cost included the engineering, procurement and construction for the first LNG train of 1.9 million tonnes per annum of LNG production capacity, a 22-kilometre connecting gas pipeline, gas treatment and liquefaction plant, a 200,000-cubic metre LNG tank, jetty and ship loading facility and supporting infrastructure.
The capital cost of the second LNG train, which would also have a 1.9 mtpa production capacity, has been estimated at US$500 million. According to LNG Ltd, when factoring in additional dredging costs, this equated to a total LNG project cost of US$1.7 billion for a 3.8 mtpa LNG production capacity.
“This represents US$450 per tonne per annum LNG production capacity, being less than half the cost being reported for other Australian LNG projects and a cost saving of over US$1 billion for 3.8 mtpa LNG production capacity,” the company stated.
However, LNG Ltd said that, together with its EPC contractor China Huanqiu Contracting & Engineering Corporation (HQC), it was currently reviewing and fully validating all costs and agreeing to key EPC contract commercial terms before the fixed price lump sum amount for the EPC contract is finalised.
“The company and HQC will continue to refine the capital cost on an open book basis over the next three months, in the lead up to signing a legally binding and bankable EPC contract,” Bridgwood said in a statement on Tuesday.
LNG Ltd chief financial officer Norman Marshall confirmed that the two parties have progressed to a third draft of the contracts and said meetings were planned in Beijing and Singapore for the first quarter of 2013 to finalise the agreement.
“The EPC contract is one of two key contracts required for the LNG Project to proceed to final investment decision and recommencement of construction,” Marshall said.