LNGL wins Fisherman’s Landing project extension

OREANDA-NEWS. The Queensland government has granted Australia's LNG Limited (LNGL) an extension to complete its proposed 1.9mn t/yr Fisherman's Landing LNG (FLLNG) project at Gladstone to December 2017.

The project has been shelved until LNGL can secure binding offtake and gas supply agreements. But LNGL has agreed to pay A\$1mn (\$770,000) to Gladstone Port to extend the lease for the project until March 2016, keeping alive some hope that the project will proceed. The deadline for completing project construction and an associated pipeline has been pushed back at least a year until end-2017.

Uncertainty over LNG price direction and the future of oil-linked LNG pricing has dampened appetite for FLLNG and some other projects.

LNGL plans to apply a similar third-party processing model at FLLNG as at its planned 8mn t/yr Magnolia LNG and Bear Head LNG projects in North America. Under this model, the firm receives a fee to provide liquefaction and LNG storage services, with other companies committing to supply deals. This would be a new business model for Australia and it is unclear whether it is viable given higher costs in the country compared with the US.

FLLNG has yet to tie up project funding. LNGL still has to secure enough gas to supply the project and will be competing with three other LNG projects at Gladstone, as well as with domestic gas users in Queensland and neighboring New South Wales, where a supply shortage is expected over the rest of this decade.

The 9mn t/yr Australia Pacific LNG (APLNG) and 7.8mn t/yr Gladstone LNG (GLNG) projects at Gladstone are due to start producing LNG around October, while the 8.5mn t/yr Queensland Curtis LNG (QCLNG) project at the port began commercial production from its first train in December and loaded its first cargo in January.