Australia: Eastern Star Gas Makes FEED Appointments

Eastern Star Gas Limited today announced two major initiatives:

– First, AMEC, in association with Zetkin, MWH and Unidel, has been appointed by ESG, as Operator of the Narrabri Coal Seam Gas Joint Venture (ESG 65% with Santos 35%), to do a Feasibility Study and review options for the development of upstream gas production, processing and compression facilities, followed immediately by front end engineering and design (‘FEED’) of selected options.

– Second, Hitachi Ltd and Toyo Engineering Corporation have been appointed to undertake FEED for ESG’s LNG Newcastle (‘LNGN’) Project. FEED work for the LNGN Project will involve optimisation, design and detailed costing of the Project, including LNG storage tank, jetty and loading facilities. Hitachi and Toyo will be closely supported by Chart Energy & Chemicals Inc, which will provide IPSMRTM process technology and core equipment for the gas liquefaction process.

In parallel with upstream and LNGN Project FEED work, project approvals processes, port access arrangements, domestic and LNG marketing activities and project commercial arrangements, including project ownership structure and financing, will be advanced. With FEED completion expected in the fourth quarter and subject to Federal environmental approvals, final investment decision would be possible by the first quarter of 2012 with potential for domestic gas supply by 2014 and first export of LNG by 2015.

On announcing the appointments Mr David Casey, Managing Director of ESG, said “these commitments represent a significant milestone in their own right, taking us closer to realising the vision for development of the Narrabri CSG Project and to creating a major new industry for NSW. The upstream Feasibility and FEED work will position us to develop the Narrabri CSG Project to supply gas at rates that will make NSW self-sufficient in terms of gas supply. The LNG Newcastle Project FEED work will build upon Feasibility Studies already completed, our specific focus being electric-motor driven, mid-scale technology that is ideally suited both for use at Newcastle and for supply from a coal seam gas project”.

In particular Mr Casey noted “not only is the capital cost of the LNG Newcastle Project expected to be well below that achievable for larger-scale developments, the use of inverter controlled electric motor drives should make the process more reliable, flexible and efficient”.

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Source: Eastern Star Gas, February 7, 2011;