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    Media Statements

    Coat of ArmsMedia Release
    Deputy Premier and Minister for Infrastructure and Planning
    The Honourable Paul Lucas

    LNG INDUSTRY IN THE PIPELINE

    Deputy Premier and Minister for Infrastructure and Planning
    The Honourable Paul Lucas

    Wednesday, May 21, 2008

    LNG INDUSTRY IN THE PIPELINE

    The State Government is examining extending the Gladstone State Development Area to take advantage of Queensland’s vast coal seam gas reserves.

    Deputy Premier and Minister for Infrastructure and Planning Paul Lucas said Curtis Island had been identified as a suitable location for potential large-scale LNG processing facilities.

    “With companies already lining up for gas projects, Queensland has the chance to become a major exporter thanks to untapped coal seam reserves in the Surat and Bowen basins,” said Mr Lucas.

    “The Bligh Government is committed to planning for the future of this potential industry, that could inject billions of dollars into Queensland’s economy.

    “To that end, the Coordinator-General will seek public submissions from Monday, 26 May 2008 on a possible extension of the existing Gladstone State Development Area to Kangaroo Island and the southern area of Curtis Island below Graham Creek.

    “The Coordinator-General’s proposal would add another 6,420 hectares to Gladstone’s existing 22,000 hectare SDA.

    “The extension is being considered to secure land for potential LNG projects, or other industry, plus buffer zones and management areas.

    “This area’s proximity to sheltered, deep water berths and large safety and security zones for carrier ships makes it ideal for LNG processing facilities.

    “Having said that, any such plant would have to undergo strict environmental assessments to gain approval in the future.”

    Already five major groups are investigating the feasibility of establishing processing plants in Gladstone: Santos, LNG Limited/Arrow, Sunshine Gas/Sojitz Corporation of Japan, LNG Impel and BG/ Queensland Gas Company.

    These add up to over $17 billion worth of planned capital investment and around 3000 construction jobs.

    “Those projects have potential long-term economic benefits of more than $15 billion and about 600 permanent jobs, however we must weigh those advantages against environmental concerns, future domestic energy requirements, and processing needs.

    “The State Government will consider these matters in the coming months.”

    The $7 billion Santos project has already been declared a significant project so that an environmental impact statement (EIS) can be conducted.

    It is expected that BG/Queensland Gas Company will soon seek a significant project declaration for an estimated $8 billion project.

    Only a fraction of Queensland’s vast recoverable reserves of coal seam gas, estimated at about 16,000 petajoules (PJ), have so far been commercialised, although production is growing.

    “Less than a decade ago, Queensland’s produced only 4 petajoules of coal seam gas a year. By last financial year, production had increased 20-fold, to 86 petajoules,” said Mr Lucas

    “This growth is expected to continue, driven by increased electricity demand, rising oil prices, a desire by countries to reduce their reliance on the Middle East as a source of energy, and the ‘cleanliness’ of coal seam gas compared with other fossil fuels.”

    Domestic energy policies have already helped Queensland’s CSG suppliers expand.

    With a gas-fired power station emitting half the greenhouse gases of a coal-fired equivalent, the State Government has committed to further use of the cleaner energy.

    This week a Clean Energy Bill was passed that will fast-track Queensland’s mandatory gas-fired electricity generation from 13 percent to 15 percent by 2010, and 18 percent by 2020.

    Further information on this proposed extension to the SDA can be found at www.dip.qld.gov.au. Public submissions can be lodged until June 20.

    Media contact: Matthew Klar - 0437 435 223

    Note to newsdesks:

    Unlike natural gas, which is stored under pressure in the pore spaces between grains of sandstone or similar rock, CSG (predominantly methane) bonds as a thin film on to the coal surface. This gas is released when pressure on the coal seam is reduced, usually after water is removed from the seam.

    The gas is chilled to minus 162 degrees Celsius, at which point it condenses to a liquid less than one-600th its volume as a gas. In this form, it can be economically transported by LNG tankers.

    As an end product, coal seam gas is substantially the same as natural gas and can be used in all commercial gas applications.