BG Group wins approval for LNG plant
Release Date: 2010-06-25
The Queensland government has given the British-based BG Group its environmental approvals for a liquid natural gas plant at Gladstone.BG is the the second group with such an approval. But like Santos/Petronas, the other group that has received its environmental approvals from the Queensland government, BG Group is struggling to assess the impact of the federal government's proposed resource super-profits tax before it makes a final investment decision on the project.
Mining industry sources told The Australian that the federal government was close to cutting a deal this week with the LNG companies which would place them under the Petroleum Resources Rent Tax instead of the RSPT. But the change of prime minister may delay these negotiations.
BG Group's Australian chief, Catherine Tanna, met Kevin Rudd, Wayne Swan and Resources Minister Martin Ferguson in Canberra last week to outline her project's problems with the RSPT.
While both Santos and BG Group now have their relevant approvals from the state government -- largely related to environmental matters -- they still need approvals from the federal government.
But both Santos and BG have the jump on Origin/Conoco-Phillips and the Arrow/Shell grouping, the other two major consortia trying to set up LNG refineries in Gladstone.
An LNG plant costs around $15 billion, and the industry consensus is that two projects is the most likely outcome, rather than four.
If this transpires, Origin and Arrow may use either the Santos or BG refinery, assuming they still go ahead despite the RSPT.
BG Group's approvals were granted by Queensland's co-ordinator-general, Colin Jensen, who is leaving the state government to become chief executive of Brisbane City Council.
One condition attached to BG's approval is that the company "facilitate the development" of 250 houses in Gladstone and 280 houses on the western Darling Downs, the source of the coal seam gas to be frozen into LNG in Gladstone.
Queensland Premier Anna Bligh said the LNG project on Curtis Island near Gladstone could create up to 8000 jobs, and the government was keen to see smaller suppliers benefit from the project.
"If all the necessary approvals are granted and the company confirms its final investment decision later this year, the project could be shipping supplies from 2014," Ms Bligh said.
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