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LNG Ltd Fisherman's Landing Costs Remain on Budget at $1.1B

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Australia's Liquefied Natural Gas Limited (LNG Ltd) revealed Tuesday that the cost of its proposed Fisherman's Landing LNG project in Gladstone, Queensland, remains on budget at $1.1 billion.

In a statement published, the company confirmed that the total capital cost estimate for its Fisherman's Landing LNG project is consistent with the company's reported estimates since January 2012, as well as being materially the same as proposed in March 2010.

"We … are very pleased that previous capital cost estimates are being confirmed, especially when most other LNG projects are having to contend with substantial cost increases," the company's CEO and CTO Paul Bridgwood said in a statement.

Project cost overruns among LNG developments in Australia have been a focal point among industry watchers in the last few months. LNG projects that have already announced cost increases this year include Santos' Gladstone LNG (GLNG) project and BG Group's Queensland Curtis LNG (QGLNG) project.

Santos said in late June this year that the cost of its GLNG project will increase by 16 percent to $18.5 billion, while BG Group disclosed in May that it needs to spend $5.4 billion more than it had originally estimated for the $20.4-billion QGLNG project.

Meanwhile, the Chevron-operated Gorgon project is also likely to see heightened cost projections moving into next year. The Australian Financial Review newspaper reported Nov.14 that the giant development could see cost increases of more than $21 billion to over $63 billion.

LNG Ltd noted that its estimated capital cost included the engineering, procurement and construction for its first LNG train of 1.9 million tonnes per annum (mtpa), a 17-mile (22-kilometer) connecting gas pipeline, a gas treatment and liquefaction plant, a 200,000-cubic meter LNG tank, jetty and ship loading facilities and supporting infrastructure.

The capital cost of the company's second LNG train - also designed to produce 1.9-mtap of LNG - has been estimated at $500 million; bringing the project's total estimated cost to $1.7 billion for a 3.8-mtpa facility.
 

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