Shell, PetroChina JV Awards Queensland LNG Contracts

Design and early engineering work is to begin on a multibillion dollar gas-export plant in Australia, Royal Dutch Shell PLC (RDSB) and PetroChina Co. (PTR) stated on Tuesday. It comes nearly a year after Shell and PetroChina acquired the project through their joint A$3.4 billion takeover of coal seam gas developer Arrow Energy Ltd. Shell and PetroChina's plans will involve the initial construction of two processing units at Gladstone that are capable of producing a combined 8 million tons of LNG annually for export. The companies have stated the annual capacity could be doubled to 16 million tons of LNG in future by adding two further trains.

By 2020Queensland's LNG output is set to reach at least 25 million metric tons, surpassing Australia's current LNG production that totaled 20.8 million tons in the year to June 30. "Labor shortages are likely to be a major constraint on projects meeting their timetables. Shortages are only beginning to emerge but are expected to intensify in 2012, particularly for project sub-contractors," EnergyQuest said. "The design will use Shell's proprietary LNG technology," Andrew Faulkner, chief executive of Arrow Energy, said in a statement.