Australia Pacific liquefied natural gas project, Australia

10th April 2020 By: Sheila Barradas - Creamer Media Research Coordinator & Senior Deputy Editor

Australia Pacific liquefied natural gas project, Australia

Name of the Project
Australia Pacific liquefied natural gas (APLNG) project.

Location
Australia.

Project Owner/s
APLNG, a 50:50 joint venture between Origin Energy and ConocoPhillips. Sinopec has agreed to subscribe to 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.

About 8.6-million tonnes a year of LNG production from APLNG had been committed under long-term take-or-pay contracts with Sinopec, in China, and Kansai, in Japan.

Potential Job Creation
Not stated.

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

Planned Start.End Date
The start of shipments from APLNG started in January 2016.

Latest Developments
Origin Energy has announced plans to cut between A$300-million and A$400-million in upstream capital expenditure (capex) at the APLNG project for 2021.

The reduction will be driven by reduced development activity and lower exploration and appraisal, but is not expected to materially impact on production in 2021.

Excluding the APLNG project, Origin is also targeting a 5% to 10% save in capex for 2020, from the previously targeted A$530-million to A$580-million spend.

Origin has said that the continued focus on cost efficiencies has also driven APLNG’s forecast distribution breakeven, down to between A$29/bl and A$32/bl, inclusive of about $8/bl of project finance principal repayment, based on the Australian/US dollar exchange rate of 70c.

The company has also noted that there has been no change to APLNG’s production or distribution breakeven guidance for 2020, with the cash distribution from the project subject to debt serviceability tests under the project finance arrangements, which are satisfied at current forward oil prices.

With no further material decline in forward oil prices, Origin continues to expect total cash distributions from APLNG to reach between A$1.1-billion and A$1.3-billion in 2020.

Key Contracts and Suppliers
Cimic (gas gathering and infrastructure works).

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