Name and Location
Australia Pacific liquefied natural gas (APLNG) project.

Client
APLNG, a 50:50 joint venture between Origin and ConocoPhillips. Sinopec has agreed to subscribe for a 15% equity interest in APLNG.

On completion of the transaction, the ownership interest of Origin and ConocoPhillips will be reduced to 42.5%.

Project Description
The project will consist of the further development of APLNG’s gasfields in the Surat and Bowen basins, in south-western and central Queensland respectively; a gas pipeline from the gasfields to a liquefied natural gas (LNG) facility, in Gladstone, Queensland; and an LNG facility on Curtis Island, in Gladstone, the first two trains of which will have a processing capacity of up to nine-million tonnes a year.

Value
The cost of the project is estimated at $24.7-billion.

Duration
First LNG production is expected in 2015.

Latest Developments
The continuing low oil price could impact on the earnings that oil and gas major Origin Energy expects to receive from its investment in the APLNG project, the company has stated in a shareholder review.

Origin Energy MD Grant King has noted that the company is actively and aggressively reviewing all aspects of the company’s business and the funding thereof, and will take "whatever steps necessary" to ensure continuous and effective operation amid low oil prices.

As the upstream operator of the APLNG, Grant has said Origin has initiatives in place to reduce the project’s operating and capital costs by $1-billion a year below costs during the construction phase.

Of this, about $650-million has been achieved in the 2015 financial year, with the remaining $350-million of cost reduction initiatives to be implemented by the end of the 2016 financial year.

Key Contracts and Suppliers
None stated.

On Budget and on Time?
A review of the APLNG project has increased the estimated price from $23-billion to $24.7-billion.

According to Origin MD Grant Kind, the increase in costs reflects increased certainty around well and gathering locations for gas for Train 2. This allows more accurate cost estimates, changes to the coal seam gas water management scope to align with revised government policy, cost increases for third-party LNG projects in which APLNG has an interest and an increased allowance for project contingency.

Contact Details for Project Information
APLNG external affairs manager Fiona McLeod, tel +61 7 3021 3325.