Australian LNG train starts: one down, 13 to go

 

The first cargo from  the world's inaugural Coal Seam Gas-to-LNG (CSG-LNG) train was delivered at QCLNG in January 2015 and another 55 mmtpa of LNG capacity is under construction from an additional 13 trains.

But whilst the scheduling of CSG-LNG projects has generally remained firm, the timing of others – including the Chevron-operated Gorgon and Wheatstone developments – has been pushed back.

As a result, the Australian LNG ramp-up in our forthcoming update will include 11 million fewer tonnes in aggregate between 2015 and 2019.

LNG Ramp

LNG Shortfall

However, CSG-LNG will soon be tested and of particular concern is how each operator will ramp up a significant volume of gas in a very short time. The most productive wells will supply the first train of each project, but risk remains around the deliverability and consistency of the following supply tiers that will feed the second trains.

BG has managed its first train at the QCLNG project well so far but, with only one out of six producing, the successful delivery of the remaining trains will dictate whether CSG-LNG ramp up is a success.

Another key uncertainty is the speed and consistency of the ramp up of Train 2. Around 1,000 wells will be drilled each year to maintain momentum but the ability of operators to manage this activity as well as operate an LNG plant has not yet been tried

Australasian LNG

The next wave of LNG from Australia will start in 2017 and be exposed to a different economic climate, labour market and changing cost environment than the first tranche of projects. We believe that strong project management will be key to keeping these developments on track and ensuring that they can meet our revised timelines.

Meet Wood Mackenzie at APPEA 2015 to hear more.

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Australian LNG train starts: 1 down, 13 to go [Subscription required]

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