Darwin LNG Study to Consider 2nd Train

ConocoPhillips has confirmed that a feasibility study has been launched into a possible second train at the Darwin LNG plant in northern Australia.

The existing facility, officially commissioned in January 2006, has 3.7mn metric tons/yr liquefaction capacity.

The Northern Territory's Labor government said April 19 it will contribute A$250,000 towards a feasibility study into the potential expansion of the Darwin Liquified Natural Gas (DLNG), which it said could create thousands of jobs in the Territory. Chief Minister Michael Gunner said a second train for the Darwin LNG facility would involve a multi-billion dollar investment and represent a new development in Australia’s offshore gas industry.

The feasibility study will cost A$625,000, with the balance to be funded by Conoco, its Darwin LNG partners, and other offshore resource holders. 

In a statement sent to NGW, Conoco indicated that new offshore gas sources were needed to keep Darwin LNG economic in the longer term.

"Darwin has a global reputation as an oil and gas hub and is situated near several prospective offshore resources; however, new gas projects are challenged by high costs and low prices. Darwin LNG offers several advantages, such as established infrastructure, a world class workforce and  supply chain, and room for a potential expansion. The feasibility study is the first step in finding new ways to commercialize the huge offshore resources in Northern Australia," said ConocoPhillips in a statement sent out April 19. It commended the Northern Territory's "strong track record in delivering major projects" and welcomed its "involvement and ongoing support for the industry and recognition of the economic benefits and opportunities it provides."

Gunner said: “The oil and gas service industry has grown significantly since the commissioning of the Darwin LNG in 2006 and has continued to develop strongly throughout the construction of the Ichthys LNG facility.” He added that the NT Government will fund around 40% of the feasibility study costs, with the remainder funded by ConocoPhillips and upstream resource owners in Evans Shoal, Caldita-Barossa, Poseidon, Cash Maple and Bonaparte LNG (Petrel Tern) ventures, noting that the study is scheduled to be complete by the end of 2017.

The 8.4mn mt/yr Ichthys LNG development, also in the Northern Territory but led by Japan's Inpex, is expected to start production later this year.

Australian Prime Minister Malcolm Turnbull was expected to have a further meeting April 19 with gas producers in the east and southeast of the country aimed at assuring sufficient gas supplies for the regions' power generators to 2020, amid criticism that some Queensland LNG projects -- notably Santos' Gladstone LNG -- may have recently increased the amount of natural gas they source from the domestic market for liquefaction and export.

Mark Smedley