Market Braces For Further Delays At Queensland Projects

27 May 2014: News that CEO Chris Finlayson was leaving BG after only 16 months in the job has inevitably raised speculation that more delays and cost overruns could be in store at its Queensland Curtis LNG project in eastern Australia. The 8.5 MMt/y project is absorbing huge amounts of capital just as the company is struggling with declining production in Egypt, where output dropped further in the first quarter, and recent upstream problems in the US and the North Sea. BG said on February 4 it planned to produce the first commercial cargo from train 1 in the fourth quarter. But this schedule is now expected to be pushed back to early 2015, possibly into February, with train 2 beginning exports six months later. BG cranked up drilling at its coal bed methane reserves in the Surat basin last year, and in November it signed a second third-party gas deal with Origin Energy for up to 30 petajoules, equivalent to 41 terajoules per day or 39 MMcf/d, in 2014 and 2015 that is being used to commission the plant. This followed an earlier 20-year purchase from Origin covering 190 PJ in 2015 and 2016, falling to 25 PJ annually over the next 18 years. Download here