Eastern Gas plans $2.5B LNG facility, signs MOU with Hitachi, Toyo to start feasibility study

Source: Eastern Star Gas

Eastern Star Gas Limited, operator of the Narrabri Coal Seam Gas Project, has entered into a Memorandum of Understanding with Hitachi (HIT) and Toyo Engineering Corporation.

The MoU paves the way for a feasibility study into development of a liquefied natural gas (LNG) export project, using electric motor drives, at Newcastle, NSW.

Conceptually, the first stage of an LNG Project development at Newcastle would be sized at 1 million tonnes per annum based on the LNG liquefaction technology provided by Chart Energy & Chemicals, Inc. ESG already has sufficient reserves of gas in place to commit to development of a plant of this size.

The LNG export facility would use around 50 PJ/a of gas plus 60 MW of electricity, which could be generated using gas, and would see around 8 to 10 cargoes of LNG exported annually. Incremental expansion of the project, potentially on an open-access basis, will be possible through installation of additional 0.5 Mtpa production trains, with realistic potential for exports to increase to at least 4.0 million tonnes per annum as gas reserves and markets grow.

Speaking at the signing ceremony, ESG Chairman John Anderson highlighted the significant benefits of the project for NSW. “The proposed Newcastle LNG project will deliver significant benefits on many fronts. Short-term and long-term jobs will be created in both regional NSW, through gas production and pipelining activities, and in Newcastle, where gas liquefaction and export will take place.”

“Capital expenditure on gas production activities will exceed $1 billion over the life of the project. A further $1 billion will be expended up-front for construction of a first-stage, 1 million tonne per annum LNG plant and around $500 million expended on pipeline infrastructure. This is in addition to the more than $1 billion the State Government will receive in royalty payments over the life of the project.”

The Consortium envisages front-end engineering and design activities could commence by yearend with a view to first LNG export in 2014.

David Casey, Managing Director of ESG, said “The feasibility study follows earlier independent studies commissioned by ESG that concluded export of LNG via Newcastle is both technically and commercially viable. As an established port in close proximity to Narrabri, Newcastle is the stand-out location for consideration for an LNG project in NSW. The feasibility study will seek to confirm the viability of an LNG export project at Newcastle using Hitachi / Toyo’s mid-scale electric motor driven technology.”

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