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Queensland May Export 20 Million Tons a Year of LNG, Bow Says

By Angela Macdonald-Smith

April 6 (Bloomberg) — Australia’s Queensland state may export about 20 million metric tons a year of liquefied natural gas by 2020, equal to the nation’s total existing output, said Bow Energy Ltd., which aims to supply coal-seam gas to plants.

That forecast will require a “substantial” amount of gas extracted from coal seams and Brisbane-based Bow is “well positioned to participate,” John De Stefani, chief executive officer for its LNG and commercial operations, said at a conference today in Sydney.

Australia’s coal-seam gas industry drew about A$22 billion ($16 billion) in investment last year as companies such as BG Group Plc and ConocoPhillips sought to gain from demand in north Asia for cleaner-burning fuels. At least five rival LNG projects are planned in Queensland based on coal-seam gas, which hasn’t yet been used for a large-scale export venture.

“It’s just amazing how a new industry can grow and become so significant in such a short space of time,” Barry Dawes, managing director of Sydney-based resource investment firm Martin Place Securities Pty, said at the conference.

Royal Dutch Shell Plc, which said in February it is studying a site near Gladstone in the northeastern state for a potential LNG project, may produce 9 million tons a year from its plant, using three processing units, De Stefani said.

It’s too early to comment on the capacity of Shell’s potential project, said Claire Wilkinson, a Perth-based spokeswoman for the company’s Australian unit.

A 1.5 million tons-a-year LNG project planned in Gladstone by Liquefied Natural Gas Ltd. will require 90 petajoules, or about 85 billion cubic feet, a year of coal-seam gas from supplier Arrow Energy Ltd., De Stefani said.

On that basis, 20 million tons of annual LNG capacity will require 1,200 petajoules a year of coal-seam gas supply. That’s more than eight times Australia’s total 2008 coal-seam gas production of 142 petajoules, according to Adelaide-based consultantEnergyQuest.

To contact the reporter on this story: Angela Macdonald-Smith in Sydney

Last Updated: April 6, 2009 01:41 EDT 


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