ConocoPhillips (COP: Quote) on Tuesday announced the sanction of development of a second 4.5 million tonnes per annum production train for its Australia Pacific LNG coal seam gas to liquefied natural gas project in Queensland, Australia.
LNG exports from the second train are scheduled to commence in early 2016 under binding sales agreements to Sinopec Corp. and Kansai Electric Power Co.
The estimated gross capital cost associated with the second train is US$6 billion, with a total two train project cost of US$20 billion.
Following the start up of the second train, the project has an anticipated peak production net to ConocoPhillips of 100,000-105,000 barrels of oil equivalent per day.
With sanction of the second train, the agreement for Sinopec to subscribe to an increased equity interest in the Australia Pacific LNG joint venture is now unconditional with completion due to occur shortly. Sinopec's ownership interest will increase from 15% to 25%, with ConocoPhillips' and Origin Energy's ownership interest each being reduced from 42.5% to 37.5%.
Origin Energy and ConocoPhillips previously agreed, subject to certain milestones, that final investment decision payments on the first two trains of the project will be deferred until ConocoPhillips achieves an agreed cash rate of return on its project investment, including acquisition cost. Accordingly, this project sanction defers ConocoPhillips' final investment decision payment of US$500 million for the second train of the project.
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by RTT Staff Writer
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