According to The Australian Financial Review today, BG Group and its Asian partners in the $US20.4 billion Queensland Curtis LNG venture have given the go-ahead for a further $1.7 billion of investment to drill up to 400 more wells to maintain gas supply, providing a welcome lift to resources industry spending.
Drilling for the Charlie project will take place during the next two years in permits west of Wandoan in the Surat basin, with Leighton Contractors winning the main contract to carry out the work, which will create up to 1600 jobs.
The large investment underscores the ongoing spending commitment required by Queensland coal seam gas-based LNG projects, which need to keep drilling new wells every year to maintain gas supplies for their export plants in Gladstone. BG started shipments from its QCLNG venture in January, marking the first gas exports from Queensland, and has so far delivered 62 cargoes to Asia.
It also shows that British-based BG has not deviated from investment required to support the QCLNG project, even as it is set to be acquired by Royal Dutch Shell in a proposed $US70 billion ($98 billion) takeover and as returns from the venture are squeezed by low commodity prices.
As partners in QCLNG, China National Offshore Oil Corporation and Tokyo Gas will fund part of the work, but the British company will shoulder most of the investment in line with its 73.75 per cent stake in the gas permits.
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