BG Group Achieves World First for LNG Production

Published at 01:42PM - 09/01/15

Oil and gas giant BG Group has begun to production to generate LNG using coal seam gas, in the first scheme of its kind around the world. Typically, natural gas is cooled to produce LNG, but the company’s new Queensland Curtis plant is being fed from coal seam wells, with over 2,000 of the gas wells located onshore. These are joined to a single length of pipeline stretching over 540 km that links to the Curtis Island liquefaction plant, located on Australia’s east coast.

At this point, the coal seam gas is cooled to minus 162 C. This converts it into a liquid state and allows it to be shipped for sale. The plant’s initial shipment was transported to China in an LNG tanker at the end of December.

The LNG that BG Group is generating from the Surat Basin’s natural coal seams comprises 98pc methane. This means that minimal levels of processing and intervention are required to prepare it for onward transportation. A low-pressure transfer process takes the extracted gas and transports it to a compression station which acts to boost the rate of flow. This pumps the gas over to a central plant for processing, where final water traces are extracted. A final compression stage then occurs before transport can occur via the series of high-pressure pipelines to the liquefaction plant.

The project investment period will be four years and will see over $20 billion USD spent on the new scheme. There are plans to build a second plant in Q3, which will boost overall production to c. 8m t/y.

LNG production is currently big news in Australia, and new facilities are being invested in by other energy companies alongside BG Group, including Chevron and Shell. The race is on for these companies, as Asia’s demand for energy begins to rocket. Previously, Qatar was the world’s biggest exporter of LNG and due to hold the title up until 2018 at least, but now Australia will overtake it in the race to dominate production.

However, there are still challenges ahead. The development work requires significant investment and ongoing operational costs tend to be high. Additionally, there are significant shortages in available skills across the employment market, and other energy projects in Africa and the USA look set to exert a downward pressure on the price of LNG. These proposed new developments could seriously test the market competitiveness of new projects in construction or planned imminent builds.