Grow with the flow: another LNG deal, 17 years on

AUSTRALIA's second export LNG (liquefied natural gas) project has commenced operations with the arrival of a carrier in Darwin to load the first cargo from ConocoPhillips's Wickham Point plant.

The Kotowaka Maru, a 125,000 cubic metre LNG carrier, is expected to leave within the next two days.

An LNG carrier will arrive at the load-out facility in Darwin every 7-10 days.

The first shipment from Darwin comes almost 17 years after Australia's first LNG exports from the NW Shelf gas project to Japan in 1989.

Since then, the project, now Australia's biggest resources development, has loaded more than 2000 cargoes.









The $2 billion Darwin LNG project - which includes the cost of the Wickham Point plant and the pipeline linking it to remote gas reservoirs - is the second phase of development for the ConocoPhillips-operated Bayu Undan gasfields in the Timor Sea, about 500km northwest of Darwin.

The Bayu Undan reservoirs are included in the Joint Petroleum Development Area administered by the Australian and East Timor Governments, which means 90 per cent of the government revenues from Bayu Undan go to the Timor Government. More than $US300 million has been provided to East Timor from Bayu Undan, by far the biggest contribution to the country's revenue.

Darwin LNG has contracts to supply Toyko Electric and Tokyo Gas with around 3 million tonnes of LNG a year for 17 years.

Santos, with 10.64 per cent, is the only direct Australian investor in the project, which was completed on budget and early. The the first shipment was originally scheduled to be loaded in March.

It will usually take 10-12 hours to load a ship in Darwin, although the initial cargo will take a little longer to meet the demands of final commissioning.

Northern Territory Chief Minister Clare Martin, who witnessed the early morning arrival of the Kotowaka Maru, said that the dream of making Darwin the second international gas hub in Australia had come true after years of hard work.

"This is as big as it gets. The first shipment of LNG marks a new stage of growth for our economy, which will see jobs for Territorians," she said.

The Wickham Point site has approval for the production of 10 million tonnes of LNG a year and ConocoPhillips is actively pursuing new gas supplies for an expansion.