There has been some uneconomic duplication of facilities such as loading jetties at the three LNG export projects being built on Curtis Island offshore the eastern Australian port of Gladstone, a senior executive at one of the projects admitted Friday.
"With 20/20 hindsight that's how it might be perceived," said Rod Duke, downstream vice president for Santos' Gladstone LNG project.
The other two LNG projects being built on the island are the 9 million mt/year Australia Pacific LNG and the 8.5 million mt/yr BG-led Queensland Curtis LNG. All three projects aim to liquefy methane from Queensland's onshore coal seam gas fields for export to Asia.
"The three projects were all looking for market share," when they were given the green light, Duke explained, adding that now they are at a stage where less competition and more cooperation can take place, for example with the construction of short 'hopper' connections between the three project's pipelines where they converge near Gladstone.
Such connections would allow the three projects to buy and sell gas from each other at times of need, such as production shortfalls, or surplus, for example during maintenance shutdowns, Duke explained.
Duke, who was appointed in February to oversee the construction and start-up of Santos' liquefaction plant and related pipelines, was speaking to journalists on a press tour of Santos' Queensland operations last Friday.
The Santos executive said the gas-focused Australian company is tunneling between the mainland and the 58,000 hectare (143,320 acre) island to lay the final section of its 420 km (260 mile) pipeline, whereas the other two projects are laying their pipelines in shallow trenches on the seabed.
All three pipelines will link CSG fields in Queensland to the LNG terminals being built on Curtis Island. Santos expects to complete its pipeline in the second quarter of next year, ahead of GLNG's expected first exports in 2015.
Last year Santos said costs at the project, which is 50% complete and which the Adelaide-based company is developing alone, had risen 15% to $18.5 billion.
In May 2012 BG said costs at QCLNG had risen from $15 billion to $20.4 billion, while currency fluctuations have also had a negative impact on the A$23 billion ($22 billion) cost of APLNG, which is being developed by Australia's Origin Energy, with a 37.5% shareholding and US major ConocoPhillips, which also has a 37.5% stake in the project. China's state-owned Sinopec owns the remaining 25%.
