SANTOS Ltd and Petroliam Nasional Bhd (Petronas) have appointed Bechtel as the front-end engineering design (FEED) contractor for the downstream components of the Gladstone liquefied natural gas (GLNG) plant in Australia.

In a statement, Santos said the contract is valued at A$40 million (RM96.4 million) and covers FEED on a liquefaction plant and associated infrastructure on Curtis Island, Australia.

The GLNG project involves the construction of an initial 3.5- million-tonne per annum LNG liquefaction plant on Curtis Island in Gladstone Harbour, with gas supply from the Santos/Petronas coal seam gas fields in South East Queensland, Australia.

A final investment decision is expected in the first half of 2010. The GLNG project remains on schedule for first shipments of gas in 2014, the statement said.

"The combination of Santos, Petronas and Bechtel means our project is in safe and capable hands," Santos chief executive officer David Knox added.

In May 2008, Petronas signed an agreement with Santos to purchase 40 per cent interest in the latter's LNG project in Gladstone for US$2.5 billion (RM8.7 billion).

Petronas had said that it will make an initial investment of US$2 billion (RM7 billion) and a further payment of up to US$500 million (RM1.7 million) upon a final investment decision approval for a second LNG train.

Under the agreement, a 60:40 joint-venture company will be formed to develop and operate a gas liquefaction facility in Gladstone, with an initial one-train capacity of three million tonnes a year.

The entity will also build and operate a 450km pipeline from jointly-owned upstream coal seam gas (CSG) assets to the project site as well as undertake all marketing activities for the project's LNG output.

The LNG project partners will cooperate in the exploration and production of selected upstream CSG assets in Queensland, with Santos as the operator.

(c) 2008 New Straits Times. Provided by ProQuest LLC. All rights Reserved.

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