Wood Mackenzie Analyses Extreme Rainfall Impact on Queensland LNG Projects, Australia

Wood Mackenzie released report following Australia’s recent extreme rainfall on the east coast and its tragic human toll. Wood Mackenzie has analysed the impact on the upstream industry.

While the rains and rivers are now subsiding, some areas surrounding Queensland’s prime Coal Seam Gas (CSG) acreage in the Surat basin remain inundated.

The key findings of Wood Mackenzie’s analysis of the impact of the upstream industry, titled ’Queensland LNG Projects weather the storm’ are:

• Localised flooding has made a number of roads and well sites near the Undulla Nose temporarily inaccessible. This could have a knock-on effect on extensive drilling campaigns which are underway in Queensland LNG projects.
• Operators suggest the upstream impact will be minimal, as there is little or no damage to equipment or facilities, and drilling programmes will be arranged to maintain developing schedules.
• Drilling in some areas has restarted, with the worst affected areas expected to resume drilling programmes over the next few weeks, when access roads to well sites become passable.
• Heavy rainfall near Gladstone has affected installation of the QCLNG, GLNG and APLNG gas export pipelines to Curtis Island. These are crucial items for the respective projects and the rains could result in some slippage of operators’ targeted timeline.
• Workers have already returned to the LNG plant construction sites on Curtis Island, and the heavy rainfall is unlikely to cause any meaningful delays to downstream project schedules.

Wood Mackenzie’s current analysis suggests that the impact of flooding on Queensland’s CSG industry is not expected to be as severe as in previous years because flooding is more localised; Operators have built in greater contingency for wet weather events in drilling and construction, given the experience of previous years; and APLNG, GLNG and QCLNG have additional rigs on site with which to recover any lost time.

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LNG World News Staff, February 04, 2013; Image: Santos