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BG wins approval for Australian gas plant

Energy firm BG Group has announced it had received final approval to develop a new £9.3bn liquefied natural gas plant in Australia.

The Queensland Curtis Liquefied Natural Gas project, which is on Curtis Island in Queensland, will be the first plant in the world to convert coal seam gas into liquid natural gas (LNG).

It will produce 8.5M.t of LNG annually – the equivalent of 10% of all of the gas used in the UK each year.

The group plans to invest £9.35 bn into the project over the coming four years, making the plant its biggest ever investment.

The project will also involve the construction of a 540km pipeline to transport the coal seam gas from where it will be extracted to its processing plant.

The LNG will mainly be sold in Asia, where there is a huge demand for it, with the first exports planned for 2014.

BG already has customers in China, Japan, Singapore and Chile lined up to buy 9.5M.t of LNG a year.

There are currently plans to create four plants to turn coal seam gas into LNG in Australia, but BG’s is the first to get the go-ahead. the move follows nearly three years of regulatory and public reviews.

The plant will be operated by QGC, BG’s Australian subsidiary.

Coal seam gas is the natural gas that occurs when coal is formed deep underground. It becomes trapped in coal seams by water pressure.

It is extracted through wells and processed to remove the water, before being piped to a compression plant where it is converted in LNG for transportation around the world.

Chief executive of BG Group Frank Chapman said: “In early 2008, we announced our first investment in Australia.

“Today, less than three years later, we are announcing our decision to develop the world’s first LNG plant to be supplied by coal seam gas and the foundation project at the centre of a major new Australian export industry.”

“Today’s decision represents the realisation of a pivotal strategic objective for BG Group – to further the globalisation of our LNG business by establishing a new and material source of equity LNG in the Asia-Pacific arena.

“Today’s sanction is also a significant milestone on the road to delivery of the Group’s growth agenda over the decade ahead.”

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