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QGC’s Charlie: A vote of confidence in Queensland

At a time when volatile commodity prices are putting the crunch on new projects in the Australian gas industry, a development such as Charlie is a welcome investment.

According to EnergyQuest’s December 2015 Quarterly, Australian LNG production overall reached a record 9.1 MMt in the final quarter of 2015, up 48 per cent from a year earlier. This increased Australia’s overall trade balance by approximately
AU$500 million in December alone.

With all three of Queensland’s LNG projects – Australia Pacific LNG (APLNG), Santos GLNG and Queensland Curtis LNG (QCLNG) – now exporting from Curtis Island, developing new gas supplies for the nation’s energy mix is essential.

In line with this rising demand for gas, BG Group subsidiary QGC, along with its joint venture partners in the Charlie development, China National Offshore Corporation (CNOOC) and Tokyo Gas, plans to build on work undertaken in Phase 1 of the joint venture’s QCLNG Project by developing its natural gas tenements in the Surat.

The new two-year development, which will take place near the regional Queensland towns of Taroom, Wandoan and Chinchilla, commenced construction in November 2015 and is scheduled to be completed by the third quarter of 2017, with infrastructure including:

  • Up to 342 wells
  • Approximately 725 km of water and gas gathering pipelines
  • A 240 TJ/day field compression station (Charlie FCS)
  • A 35 km water trunkline and one 35 km gas trunkline, co-located in the same trench
  • A 35 km high-voltage overhead power line, running parallel with the trunklines
  • Two produced water storage ponds (Charlie and Phillip) and a pumping station at each pond
  • Supporting infrastructure such as access tracks, a borrow pit and laydown areas.

Building on the success of QCLNG

Named after the graticular section of the block on which the largest part of the development will take place, the Charlie development is seen as a vindication of the broader QCLNG’s project’s earlier exploration and production successes – but also as a critical new supply channel for a project that is exporting a lot of gas.

The overall QCLNG project was first commissioned in December 2014, with commercial operations from its second train commencing in November 2015.

Both of the project’s trains are expected to reach plateau production by mid-2016, producing enough LNG to load around ten vessels per month combined, or the equivalent of around 8 million tonnes
per year.

The new infrastructure at the Charlie development will be linked to facilities that were developed as part of Phase 1 of the QCLNG Project, including gas and water processing facilities.

Water produced from wells will be processed at the Northern Water Treatment Plant at Woleebee Creek, before being transported via SunWater’s 120 km Woleebee Creek to Glebe Weir Pipeline, which is capable of moving up to 36,500 ML/a of treated CSG water.

QGC’s existing central processing plant, water treatment plant and electrical substation at Woleebee Creek will also be used to process the gas, treat the water produced and provide electricity to run Charlie field compression station.

A vote of confidence in the region

QGC Managing Director Tony Nunan said Charlie was an important investment in the future of QGC’s operations, with up to 1,600 jobs expected to be created during peak construction in mid-2016.

“This is a vote of confidence in the secure, long-term future of Queensland’s natural gas industry, which will employ Queenslanders for many years to come,”? Mr Nunan said.

BG Group spokesman Paul Larter added that a range of opportunities will be available for local contractors.

“This development will help sustain the benefits of our investment in local communities and the state,”? he said.

“Major contractors have made commitments regarding local content.”?

Much of the local content opportunities for Charlie will be made available through contractors such as CIMIC Group subsidiary CPB Contractors, formerly Leighton Contractors, which was appointed as the main works contractor in early November 2015.

The project is expected to generate revenue of approximately AU$250 million to CPB over 18 months. Local contractor FKG Group, based in Toowoomba, has been an early local contractor winner, having been awarded an AU$16 million contract to widen a local road to prepare for the construction phase.

CIMIC Executive Chairman and Chief Executive Officer Marcelino Fernández Verdes said “QGC’s ongoing development of its world-class natural gas reserves is making a major contribution to the Queensland economy and growth of the LNG industry in Australia.”?

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