BG Tanker Approaches Queensland in Sign LNG Project Set to Start

BG Tanker Approaches Queensland in Sign LNG Project Set to Start

The first tanker to ship liquefied natural gas from BG Group Plc (BG/)’s $20.4 billion project on Australia’s east coast is due to arrive on about Dec. 20, signaling exports to Asia are set to begin.

The ship, the BG-owned Methane Rita Andrea, is heading for Gladstone, in Queensland state, according to data compiled by Bloomberg. BG expects the plant, the world’s first large-scale project to turn coal-bed methane into LNG, to begin by the end of the year, the company reiterated today.

BG’s Queensland Curtis LNG development is preparing to supply customers, including China National Offshore Oil Corp., as tumbling oil prices threaten to erode the industry’s profits.

The BG project, poised to become the first of seven Australian LNG developments under construction to start production, helps put the nation on course to surpass Qatar later this decade as the world’s biggest exporter of the fuel.

“The start of the project is important for BG, and it’s important for Queensland,” Graeme Bethune, chief executive officer of EnergyQuest, an Adelaide-based consulting firm, said today by phone.

The Australian plants have also grappled with high costs. BG in 2012 said the bill for its project jumped 36 percent, and the cost of Chevron Corp.’s Gorgon development on an island off the northwest coast has ballooned by $17 billion.

Despite the cost overrun, “it’s amazing that the company has been able to build a completely new project using a new feedstock” and start production about four years after approving the plant in 2010, Bethune said.

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