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Gladstone LNG projects may drop off: Patersons

Patersons Securities analyst Graeme Carson said “Given the huge capital outlay, the onerous approvals process, the competitive national LNG landscape, and capacity constraints in the region, we believe that there is no way that five or six LNG plants will be built in Queensland.

“Everyone we met from the LNG industry, the Government, the Ports Corporation or associated industries in Gladstone believed that only a portion of the proposed projects would eventuate. In fact, the consensus opinion was that one or two of the projects would actually be developed,”? Mr Carson said.

The report, entitled Queensland’s Coal Seam Gas to LNG Industry, examines five of the proposed projects including: the Santos-Petronas joint venture Gladstone LNG (GLNG) Project; BG Group/QGC’s Queensland Curtis LNG Project; LNG Ltd and Arrow Energy’s Gladstone “˜Fisherman’s Landing’ LNG Project; Origin Energy and ConocoPhillips’ Australian Pacific LNG Project; and, the Arrow CSG to LNG Project to be developed by Shell and Arrow.

According to the report, the Queensland Curtis LNG Project is the strongest proposal, and was “˜in the position to be most successful’. The GLNG Project is also likely to be successful due to its proximity to the Queensland Curtis LNG Project, and it is well progressed in terms of approvals and had strong financial backing.

The report also favours the Fisherman’s Landing project, as it is expected to secure development approvals, with a final investment decision and construction to begin in the first quarter of 2010.

Meanwhile, Santos chief executive officer David Knox told The Australian that the opportunity was closing to gain more joint venture partners for the GLNG Project.

“We need to do it in the next three or four months, otherwise it is going to be very difficult,”? Mr Knox said.

BG Group has previously been mooted as a potential partner for Santos.

However, Mr Knox also noted that “because of the complexity of merging the plant, the marketing complexity and the commercial complexity of joining the ventures together, getting to that second stage [of merging projects] is problematic.”?

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