BG Group gets green light for £9bn gas work

GAS producer BG Group said yesterday it will become the first company to liquefy gas from coal deposits, after approving a £9.3bn project in Queensland, Australia.

BG Group will start work on a processing plant and 540km of underground pipelines immediately.

The British firm said it would ship its first liquefied natural gas (LNG) in 2014, and has already made sales agreements with Chile, China, Japan and Singapore.

China National Offshore Oil Corporation (CNOOC) has signed the biggest deal within BG’s biggest ever project, after agreeing in March to take a 10 per cent stake in the first phase of the project and purchase 3.6m tonnes of the gas per year for 20 years. The contract is worth up to $70bn (£43.7bn), reports at the time said.

Chief executive Frank Chapman said the Queensland Curtis project would be the world’s first LNG plant to be supplied by coal seam gas “and the foundation... at the centre of a major new Australian export industry”.

BG Group said the decision to proceed with the project followed environmental approvals from the Australian and Queensland state governments in October.