Queensland’s recent heavy rains and floods could delay the expansion of BG Group’s $18 billion Queensland Curtis LNG plant at Gladstone because the British gas giant has been unable to shore up gas reserves as quickly as it had hoped.
Speaking to investors in London on Tuesday night, chief executive Frank Chapman said BG was still targeting a mid-2012 sanction of a third LNG production train at Gladstone.
“The name of the game at the moment is the maturation of that reserves and resources base within that period,” Mr Chapman said.
“That has suffered some impact because of the flooding and the impact that’s had on access to drilling sites, but we’re still focused on moving some of that prospective resource into a more, higher confidence level to underpin a third train.”
Despite the rains, BG was still on track for first LNG exports from Gladstone in 2014, he said.
BG was the first of three big CSG-to-LNG proponents planning exports out of Gladstone from 2014.
Mr Chapman joined the chorus of voices touting stronger LNG demand because of the Japanese earthquake and subsequent Fukushima nuclear disaster.
He said the flow-on effect was likely to be long-term. “After (the) Three Mile Island (1979 nuclear accident) in the US, we saw lead times for nuclear projects going out to something like 12 or 13 years, and associated with that will be increased costs associated with more stringent regulatory safety requirements,” he said.
“All of this, I think will result in medium to long-term higher gas demand for power, and as a consequence, extra demand for LNG, and this is going to cause a further tightening of a market situation which we already regarded as quite tight.”